NEW: Inflation Cools In February As Trump Policies Begin To Kick In

Fresh off a victory lap on declining egg prices, the Trump administration is touting the release of a cooling inflation rate that officials say signals the economy is weathering a storm of tariffs and turbulent stock markets.

Core inflation subsided last month as consumer prices rose 2.8%, below the 3% benchmark set in January, according to the U.S. Department of Labor. The rise was also slightly less than economists who spoke with the Wall Street Journal expected.

The actual cost to consumers is just 0.2% month over month, indicating a “step in the right direction,” according to one CNN analyst.

“This is definitely very encouraging to see,” he said on Wednesday, “because I think it’s going to relieve some fears that inflation will perhaps reaccelerate.”

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Inflation rates have fluctuated between 2.2 and 3.9% since August of 2023, a low since they approached a modern high of approximately 9% at the beginning of 2022.

Prices excluding food and energy—the sectors deemed “core” by economists—rose 3.1%, the lowest year-over-year reading since 2021, according to the Journal.

The uncertainty surrounding President Donald Trump’s tariff war with Canada and Mexico continues to weigh on investor sentiment. Stocks jumped at the opening bell but quickly pulled back, a sign that the hour-by-hour trade negotiations are still at the forefront of Wall Street’s mind.

Some of the salvos have netted quick wins for the president. On Tuesday, Ontario announced it had agreed to lift a surcharge on electricity exports to Michigan, New York, and Minnesota after 24 hours. The decision followed high-level talks between Trump Commerce Secretary Howard Lutnick and Ontario Premier Doug Ford.

One day earlier, President Trump announced he was imposing an additional 25% tariff on Canadian steel and aluminum, bringing the total to 50%, in direct retaliation to Ontario’s electricity surcharge. He had promised to declare a “national emergency on electricity” if the Ontario surcharge took effect.

Trump administration officials will be back at the bargaining table on Thursday to discuss revisions to the United States-Mexico-Canada Agreement (USMCA) before the April 2 tariff deadline.

To be sure, Wall Street prognosticators are not yet convinced that tariffs are the key to making America great again. Last week, Goldman Sachs economists predicted a fourth-quarter core inflation rate of 2.9%, up from 2.4% the year prior.

Investors are also doubtful that the February figures will buoy the Federal Reserve’s chances of considering rate cuts at its meeting next week. Interest-rate futures on Wednesday were slightly lower than before the inflation data came out.

Still, President Trump has plenty to crow about as a result of his bargaining. The specter of tariffs cajoled major corporations like Apple and OpenAI to invest heavily in American skill-building and artificial intelligence development, and last month, Honda announced that it would be relocating production of its 2025 Civic models to Indiana after abandoning plans to use a plant in Guadalajara, Mexico.