Investors are awaiting the release of the U.S. Consumer Price Index (CPI) report for February, scheduled for Wednesday at 20:30 Beijing time, with inflation once again becoming a key focus on Wall Street. Market consensus suggests that U.S. consumer prices likely increased in February, driven by expectations of escalating conflict in the Middle East pushing up gasoline prices. As ongoing tensions continue to elevate oil prices, inflation is projected to rise further in March. The anticipated increase in last month's CPI also partly reflects the gradual pass-through of previous large-scale tariff policies from the Trump administration to end prices. While tariffs were implemented under a law applicable during national emergencies, which has since been ruled invalid by the U.S. Supreme Court, the upcoming inflation report is expected to show only a moderate rise in core price pressures for February, benefiting from relatively lower used car and airfare prices. This report is unlikely to impact short-term monetary policy, with the Federal Reserve widely expected to keep interest rates unchanged next week.

Sarah House, Senior Economist at Wells Fargo, stated, "The February CPI data may indicate that the disinflation process has stalled again." She added, "Although the Middle East conflict erupted in late February, oil and gasoline prices had already risen in anticipation of escalating tensions last month." A survey of economists forecasts that the CPI increased by 0.3% month-over-month in February, compared to a 0.2% rise in January, with estimates ranging from 0.1% to 0.3%. Over the 12 months ending in February, CPI is expected to have risen by 2.4% year-over-year, matching the increase seen in January, reflecting the fading base effects from high readings a year earlier. Specifically, economists estimate that gasoline prices within the CPI likely rose by approximately 0.8% month-over-month in February, following two consecutive months of decline. Data from the American Automobile Association (AAA) show that the national average gasoline price has surged over 18% to $3.54 per gallon since the U.S. and Israel took military action against Iran in late February. International oil prices briefly surpassed $100 per barrel before retreating on Tuesday after former President Trump suggested the conflict might end soon.

Andy Schneider, Senior U.S. Economist at BNP Paribas Securities, noted, "A 15% rise in oil prices alone could increase overall inflation by 0.15 to 0.30 percentage points, depending on how the conflict evolves." Although food prices are expected to maintain a moderate upward trend, Schneider added, "If oil prices remain elevated, they will push up fertilizer and transportation costs, potentially leading to higher food inflation later this year." Excluding the volatile food and energy components, core CPI is projected to have increased by 0.2% month-over-month in February, down from a 0.3% rise in January. Declines in used car prices, along with smaller increases in rents and airfares, are expected to restrain core inflation. However, prices for goods such as apparel and home furnishings may see significant increases as businesses pass on tariff costs. The January Producer Price Index (PPI) report indicated expanding profit margins in sectors including retail clothing, footwear, and accessories. While companies had previously absorbed most of the import tariff costs, economists suggest that firms may struggle to continue absorbing these pressures, as surveys from the Institute for Supply Management (ISM) show persistently high input costs.

Following the Supreme Court's ruling, former President Trump announced a 10% tariff on global goods, with plans to increase it to 15%. Stephen Stanley, Chief U.S. Economist at Santander US Capital Markets, commented, "The issue is that even if tariff levels largely stabilize, there are signs that input costs continue to climb. This cost pass-through effect may persist for some time." Over the 12 months ending in February, core CPI is expected to have risen by 2.5% year-over-year, unchanged from January, also benefiting from favorable base effects. Economists note that the moderate core CPI reading for February does not necessarily imply that core PCE inflation will be similarly mild. The PCE price index for January, scheduled for release on Friday after a delay, is anticipated to show a significant rebound in core inflation. Lou Crandall, Chief Economist at Wrightson ICAP, said, "Differences in weighting and stronger-than-expected PPI services prices could lead to a notably larger increase in the broader consumption price index. Similar effects might also exert upward pressure on the core PCE price index for February, due for release on April 9."

Market expectations show greater divergence regarding inflation prospects for March compared to the relatively consensus view for February. Data from prediction market platform Polymarket indicate that traders' forecasts for the year-over-year inflation rate in March are widely distributed and significantly higher than the general market consensus. Specifically, the probability assessments by Polymarket participants for the March annual inflation rate are as follows: a 2% probability for inflation at or below 2.0%; a 1% probability each for rates of 2.1% and 2.5%; a 5% probability each for rates of 2.6% and 2.7%; and a 72% probability for inflation at or above 2.8%.