US Q1 MBA Purchase Index Climbs to 171.3, Showing Spring Peak Season Buying Momentum Defying Interest Rate Volatility

US February Core CPI YoY Flat at 2.5%; Inflation Trend Steady but Geopolitical Risks Remain a Concern

Core Overview: According to the latest data, the US core Consumer Price Index (CPI) year-over-year growth rate for February 2026 (Q1 2026) reported at 2.5%, remaining flat from the previous month (January), perfectly matching Wall Street's consensus expectations. This figure continues the long-term trend of cooling inflation and remains at the lowest level since March 2021. In terms of month-over-month growth, the February core CPI rose by 0.2%, a slight slowdown from January's 0.3%, indicating that overall core inflation remained relatively stable at the beginning of this year. Key Components: Regarding component performance, shelter costs remained the primary driver supporting inflation, with the housing index rising 0.2% month-over-month and maintaining a 3.0% year-over-year increase in February. Additionally, prices for medical care, airline fares, and apparel also trended upward. On the other hand, the core goods category provided a cooling effect, with prices for used cars and trucks declining for consecutive months (falling 0.4% month-over-month), while items such as communication and personal care also saw retreats, effectively balancing the stickiness of services inflation. In-Depth Attribution: In response to this data, market interpretation showed a disconnect where "data met expectations, but sentiment is anxious." Karen Manna, Head of Fixed Income at Federated Hermes, pointed out that at a time when geopolitical uncertainty dominates risk pricing, an in-line inflation reading is merely "background noise." Since this report does not fully reflect the energy shock brought by the recent escalation of the war in the Middle East, the market is concerned that the surge in crude oil prices will break the current state of stable inflation. Outlook and Risks: Looking ahead, in the short term (1-2 months), close attention must be paid to the secondary pass-through effects caused by the surge in oil prices, such as climbing airline fares and freight costs, which are highly likely to exert upward pressure on prices in March and April. In the medium term (3-6 months), as the risk of stagflation persists, the market has significantly revised its monetary policy expectations for the Federal Reserve (Fed). The majority consensus believes that the timing of the first rate cut will be delayed to July or even September 2026, further establishing the macro paradigm of "higher for longer" interest rates. Web Search Reference Sources: https://tradingeconomics.com/united-states/core-inflation-rate https://finance.eastmoney.com/a/202603123669864275.html https://www.21jingji.com/article/20260311/herald/42d2be4c8c255fc8462e455a84e11234.html