Before the tariff impact, the U.S. February CPI unexpectedly slowed down. How long will the Federal Reserve continue to observe?

According to the Zhitong Finance APP, the consumer price increase in the United States in February was the slowest in four months, providing some relief to consumer pressure before the implementation of tariff measures (which are expected to raise costs). Data shows that after a significant increase of 0.5% in January, the CPI rose by 0.2% month-on-month in February. Excluding the often volatile food and energy categories, the core CPI also increased by 0.2%. The U.S. Bureau of Labor Statistics stated that nearly half of the increase in the overall index was due to housing, but it still slowed compared to last month. U.S. inflation rate gradually declines - price pressures are broadly easing in goods and services sectors. Airfare prices fell by 4%, the largest drop since June, as several airlines warned of weakening future demand. Prices for new cars and gasoline also decreased. Grocery prices remained nearly unchanged after a significant increase in January, while costs for cars and medical insurance rose at a more moderate pace. Although Wednesday's report provided some relief, multiple indicators still suggest that inflation is rising again. With President Donald Trump introducing a series of tariffs, prices for various goods, from food to clothing, are expected to rise, testing the resilience of consumers and the overall economy. Last week, Trump stated during a speech in Congress that tariffs are expected to lead to price increases, but this is just a "small disturbance," and the U.S. should be able to overcome it. However, uncertainty surrounding his trade policies has led to a recent stock market crash and reignited concerns about an economic recession. Trump attempted to downplay these worries on Tuesday. The Federal Reserve is patiently waiting until government actions and the trajectory of inflation become clearer, with officials widely expected to maintain interest rates at next week's meeting. Meanwhile, calls for an economic downturn are growing louder, raising speculation that policymakers may cut rates earlier than previously anticipated. Federal Reserve's interest rate cut expectations remain unchanged The outlook for an escalation of the global trade war and the prospect of sluggish U.S. economic growth overshadowed the inflation report falling short of expectations, leading to a decline in U.S. Treasury prices. U.S. Treasury yields initially plummeted after the data was released but quickly rebounded to new highs during the session, setting a new daily high. The two-year U.S. Treasury yield, which is most sensitive to Federal Reserve monetary policy, rose by 3 basis points to 3.98% on Wednesday, while the 10-year Treasury yield climbed to 4.31% Mohamed El-Erian, President of Queens' College, Cambridge University, stated: "Looking back, this is good news; looking ahead, there is very little information in the inflation data. We do not know how the transmission effects of expected tariffs and actual tariffs will play out." Interest rate swaps indicate that traders still fully expect at least two rate cuts this year, with the first cut anticipated in June. David Kelly, Chief Global Strategist at JP Morgan Asset Management, said: "The economic situation is beginning to show the reasonableness of rate cuts. However, I believe it is still too early for the Federal Reserve to make a decision given the uncertainty in policy."