U.S. inflation stayed subdued in the month leading up to President Donald Trump’s war with Iran, which has rekindled concerns about resurgent price pressures as energy costs have soared.

The consumer price index report showed that inflation steadied at 2.4% in February from the same time last year, matching January’s annual increase. On a monthly basis, overall prices ticked up 0.3%.

“Core” inflation, which excludes volatile food and energy prices, also budged little, registering a 2.5% year-over-year pace. Compared with the previous month, these prices were 0.2% higher.

February’s report, which was released by the Bureau of Labor Statistics on Wednesday, covers the period up until the United States and Israel first struck Iran on the final day of the month. Oil prices have whipsawed in the wake of the attacks, which have broadened out across the Middle East as Iran has retaliated. At one point Monday, Brent crude, the international oil benchmark, rose as high as $119.50 a barrel before retreating as Trump signaled that the war would be over “very soon.”

But even if the conflict were to end today, economists warn that the economic impact is likely to linger for longer. Oil prices, which are not expected to return to preconflict levels for quite some time, present a new inflationary risk that will keep officials at the Federal Reserve on edge. At the same time, policymakers at the central bank will be closely watching for any signs that higher gasoline prices, which Americans across the country have already started to see, are translating to reduced spending as consumers are forced to prioritize certain purchases.

Wednesday’s data is unlikely to change the Fed’s perspective that it need not be in a hurry to lower interest rates again after a series of reductions between September and December. Since January, the central bank has voted to hold rates steady at a range of 3.5% to 3.75%, a pause its officials are expected to extend when they vote on policy next week.

Economists on the margins believe that the Iran conflict, and the subsequent energy shock, will delay the Fed’s eventual resumption of rate cuts.

As concerned as policymakers are about inflation, however, they are also cognizant of the risks posed to the labor market, which has recently shown more notable signs of softening. According to the latest jobs report, employers shed 92,000 jobs in February as the unemployment rate edged up to 4.4%.

Sticky inflation and a weakening labor market is a challenging combination for the Fed, a point Austan Goolsbee, president of the Federal Reserve Bank of Chicago, raised in an interview Friday.

“If the job market is getting worse and inflation is getting worse at the same time, it’s not obvious to me what the immediate response should be,” he said.

Technology

Microsoft supports Anthropic in dispute

Microsoft is throwing its weight behind Anthropic in asking a federal court to block the Trump administration’s designation of the artificial intelligence company as a supply chain risk.

Microsoft, in a legal filing, is challenging Defense Secretary Pete Hegseth’s action last week to shut Anthropic out of military work by labeling its AI products as posing a threat to national security.

The Pentagon took the action against Anthropic after an unusually public dispute over the company’s refusal to allow unrestricted military use of its AI model Claude. President Donald Trump also said he was ordering all federal agencies to stop using Claude.

The Pentagon’s action “forces government contractors to comply with vague and ill-defined directions that have never before been publicly wielded against a U.S. company,” Microsoft’s legal brief says.

It asks for a judge to order a temporary lifting of the designation to allow for more “reasoned discussion.”

The Pentagon declined to comment on matters in litigation.

Washington

U.S. budget deficit continues to narrow

The budget deficit narrowed in February at a slower pace than the previous month as U.S. tariff revenue started to slow from the peak rate hit late last year.

For the five months through February, the government had a deficit of $1 trillion, down $148 billion from the same period the year before, after accounting for calendar-year differences, according to data released by the Treasury Department. That marks a 14% contraction in the deficit, down from the 21% pace seen for October through January.

Wednesday’s monthly budget release is the first since the Supreme Court struck down the tariffs President Donald Trump imposed under the claim of emergency powers. That ruling, which held that Trump overstepped his authority by using the International Emergency Economic Powers Act, or IEEPA, to impose a system of “reciprocal” tariffs across the globe, raised doubts over the administration’s ability to sustain import duty revenue at rates seen last year.

The government took in $26.6 billion in customs duties last month. Even before the ruling, tariff revenues were slowing, with declines on a monthly basis since reaching a peak of $31.4 billion in October.

Cyberattack

Stryker reports network disruption

Stryker, a major U.S. medical equipment company, said a cyberattack disrupted its global networks Wednesday.

“We have no indication of ransomware or malware and believe the incident is contained. Our teams are working rapidly to understand the impact of the attack on our systems,” Stryker said in a statement on its website.

The logo of Handala, a hacking group linked to Iran, has appeared on company login pages, The Wall Street Journal reported.

Stryker’s statement said the cyberattack hit its Microsoft programs. Emails seeking additional information were not immediately answered.

Stryker is based in Portage, Mich., and makes a variety of medical products, from artificial joints to hospital beds. It had revenue of more than $25 billion in 2025. The company says it has 56,000 employees around the world.

— From news services