Nice inflation report you've got there. Too bad, a lot of it's useless now. I'm kidding. Mostly.

From American Public Media, this is Marketplace.

From Minnesota Public Radio in St. Paul, I'm Kimberly Adams in for Kyra's doll. It's Wednesday, March 11th. Good to have you along. I'm at APM headquarters today instead of my normal spot in D.C. But back in the nation's capital, this morning we got the latest read on inflation from the Federal Bureau of Labor Statistics. The Consumer Price Index registered just

a 0.3% increase in the month of February. Over the past 12 months, prices rose 2.4%. That's the

lowest reading in five years. But there are, as is so often the case, some caveats to what seems like encouraging news. Here to give us her expert opinion on the report is Nicole Servi, an economist for Wells Fargo, Corporate and Investment Banking. Welcome back to the show. Thanks for having me. Can I just get your

quick reaction to the top line numbers? Yeah. So in terms of the month over months, those looked

pretty good. But if you look at, for instance, the year-of-year rates of CPI and core CPI,

they both moved sideways. And what the report suggests to me is that, yes,

inflation is not as bad as we had feared by this point in time, but we're also not seeing

progress either. And now we've got to think about this energy price shock. And so while this

report is encouraging, I do think it feels a little dated at this point in time, especially once we turn to the March CPI and get some of that immediate reaction to what we're seeing in the conflict in the Middle East.

Right. This is the giant asterisk on this report, which is that all of this data was before we went to war with Iran. Correct. And so

how are economists do you think factoring that in when reading this report? So if you look at the

energy line, for instance, you can see that gasoline prices actually rose pretty solid in February,

a little bit stronger than I think you would expect in a, let's say, a quote unquote, typical

February. And if you also think about the really bad winter storms on the Northeast, you wouldn't

expect gasoline prices to rise as much as they did. But if you look at what was going on in oil,

oil prices were actually rising in February in anticipation of potential escalation in the Middle

East. And you were seeing that risk premium being priced in. And that got directly translated to

consumers already in February with a pretty decent gain in gasoline prices. And that gain is only just going

to get stronger in March. What does this mean for the Fed? You know, the CPI reading like this

might, you know, be encouraging to folks on Wall Street that wanted another interest rate cut. But as you

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