US PRODUCER INFLATION HOTTER IN FEB; FURTHER RISE EXPECTED AMID IRAN WAR

US producer prices increased by the most in seven months in February, driven by higher costs for services and a range of goods, and could accelerate further as the war in the Middle East boosts oil prices and the pass-through from tariffs persists.

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A cashier loads a turkey and other groceries for checkout at a Walmart Supercenter retail store in North Bergen, New Jersey, US, November 21, 2025. — Reuters photo

(Reuters photo)

The stronger-than-expected Producer Price Index report released on Wednesday also suggested key inflation measures tracked by the Federal Reserve posted significant gains in February. The US central bank held interest rates steady at the end of its two-day policy meeting on Wednesday. Policymakers projected higher inflation, steady unemployment and only a single cut in rates this year.

Financial markets expected the Fed to resume rate cuts either in December or January 2027, LSEG data showed.