US Inflation slowed to a 3-month low in February, with decreases in airfares and gasoline partially offsetting shelter increases. Despite the easing, the report does not capture upcoming tariff impacts. The inflationary pressure from tariffs and trade war would weigh on the economy and complicate the Fed’s path to its 2% target. Meanwhile, while housing drove nearly half of February’s inflation increase and remains higher than the 2019 pre-pandemic average of 3.4%, it continues to show signs of cooling – the year-over-year change in the shelter index remained below 5% for a sixth straight month and posted its lowest annual gain since December 2021. While the Fed’s interest rate cuts could help ease some pressure on the housing market, its ability to address rising housing costs is limited. …Consequently, the election result has put inflation back in the spotlight and added additional upside and downside risks to the economic outlook.