Here’s what to expect in the CPI report on Wednesday

Americans hoping for good news on inflation with Wednesday’s release of Consumer Price Index data for February may have to wait a little longer for relief. 

Prices across the U.S. likely rose 2.9% last month from a year ago, which would remain well above the Federal Reserve’s target of a 2% annual rate, according to the average estimate from economists polled by FactSet. The CPI, a basket of goods and services typically bought by consumers that tracks the change in those prices over time, has cooled considerably from its peak of 9.1% in June 2022, but continues to eclipse the index’s pre-pandemic levels. 

February’s data reflects the first full month of the Trump administration, although some of Mr. Trump’s economic policies have yet to take effect, such as his 25% tariffs on Canadian and Mexican imports, now set to kick in on April 2 after a one-month reprieve. Economists now predict that inflation could tick upwards in 2025 due to Mr. Trump’s tariff regime, which means the latest inflation data could prove to be the calm before the storm. 

The ongoing rise in food prices is posing a challenge to some U.S. households, particularly among lower-income consumers who spend a greater share of their income on groceries than higher-earning Americans, according to a new Bank of America Institute analysis of consumer spending.

Egg prices

Egg prices were one of the main inflation drivers in January, with the cost jumping 53% from a year earlier. Overall grocery prices rose 1.9% over the same period, with declines in some foods, such as bread and tomatoes, offsetting the surge in egg prices. 

Since then, egg prices have receded, according to U.S. Department of Agriculture Secretary Brooke Rollins. In a March 11 Fox Business interview, Rollins said egg Prices have declined to an average of $1.85 per dozen, which she credited to the Trump administration’s five-point plan to battle the bird flu. A dozen eggs cost about $5 in January, according to data from the Federal Reserve Bank of St. Louis. 

But while egg prices could see some relief in Wednesday’s inflation report, food prices are still on the rise, economists say. On a month-over-month basis, food costs likely rose 0.3%, Vanguard said on Tuesday. 

Meanwhile, Americans themselves are bracing for higher grocery costs, according to the March 10 release of the Federal Reserve Bank of New York’s Survey of Consumer Expectations. Households are now predicting that food costs could accelerate to an annual rate of 5.1%, the highest level since May 2024, it found.

Consumers bracing for a reignition of inflation could be feeding into a sharp downturn of consumer confidence, which plummeted in February to its lowest level in four years. More Americans say they’re gloomy about their financial prospects for the year ahead, the New York Fed found in its survey.

“Households expressed more pessimism about their year-ahead financial situations in February, while unemployment, delinquency and credit access expectations deteriorated notably,” the Federal Reserve Bank of New York said. “Meanwhile, spending growth expectations rose significantly.”