Inflation in the U.S. in February unexpectedly rose to 0.2% from 0.0% the month prior on higher fuel, food and apparel costs. Core price rose by to 1.8% from 1.7% showing that overall prices rose when stripping out fuel and food costs which tend to be the most volatile signaling that we may see continued upside risk to prices. The increasing inflationary pressures will ease deflation concerns but may limit the scope of future Fed actions. The FOMC is scheduled to deliver their policy decision today at 18:15 GMT. Many are predicting that the central bank will follow the BoE, BoJ and SNB and begin quantitative easing. The dollar surprisingly weakened on the news, despite the implications for future interest rate policy, falling nearly 100 points against the Euro.
