U.S. Inflation Cooled in February as Fed Confronts Bank Failures

Elevated inflation cooled modestly in February, as the Federal Reserve faces dual threats of rising prices and financial instability.

The consumer-price index, a closely watched inflation gauge, rose 6% in February from a year earlier, versus a 6.4% gain the prior month, the Labor Department said Tuesday, the slowest pace since September 2021. The smaller increase comes as the Fed contemplates its next interest rate move while confronting price pressures and bank failures.

When excluding volatile food and energy prices, consumer prices advanced 5.5% from a year earlier in February compared...