Inflation Pressures Quietly Rising, U.S. Import Prices Post Largest Gain Since 2022

U.S. import costs in February saw the largest monthly increase in nearly four years, sharply raising concerns about a second wave of inflation in the U.S. and further squeezing the Federal Reserve’s room to cut interest rates.

Data released by the U.S. Department of Labor on Wednesday showed that import prices rose 1.3% month-over-month in February, the largest single-month increase since March 2022. The main drivers were rising oil and natural gas prices. Meanwhile, export prices surged 1.5% month-over-month, the biggest increase since May 2022, with a year-over-year rise of 3.5%, the highest level since September 2025.

These figures were compiled before the outbreak of the Middle East conflict, and the upward pressure on energy prices has not yet been reflected in the data. Market participants note that as geopolitical risks continue to escalate, expectations for a policy shift by the Federal Reserve will be further dampened, and bets on rate cuts in 2026 have nearly disappeared.

Widespread increase in import prices, with oil and Canadian goods as main drivers

The latest data from the U.S. Department of Labor show that import prices rose for the third consecutive month in February, up 1.3% year-over-year, reaching the highest level since February 2025. Structurally, the main contributors to the month-over-month increase were oil, mineral products, and non-manufactured goods, with non-manufactured goods from Canada showing particularly notable gains.

Excluding oil, import prices increased 1.2% month-over-month, also hitting a new high since January 2022, driven mainly by rising prices for capital goods and consumer goods excluding automobiles, indicating that price pressures are spreading from energy to a broader range of goods.

Export prices rise in tandem, led by industrial goods and fuels

Export prices also showed strong gains. In February, export prices increased 1.5% month-over-month, the largest since May 2022, with a year-over-year rise of 3.5%, the highest since September 2025.

Looking at specific categories, industrial goods and fuels and lubricants are the main factors driving the increase in export prices. The simultaneous rise in import and export prices indicates that price pressures are not solely imported but are present on both ends of the supply chain.

Data before the war intensifies inflation concerns, further reducing rate cut expectations

Market reactions to these figures are particularly sensitive because the data were collected before the outbreak of the Middle East conflict. Analysts believe that as geopolitical tensions continue to impact energy and commodity supply chains, there is a risk of further upward pressure on prices.

Currently, expectations for a Federal Reserve rate cut in 2026 have largely faded. The renewed inflation outlook, combined with slowing economic growth, has brought stagflation risks back into investors’ focus, potentially exerting pressure on interest rate paths and cross-asset pricing.