February inflation measured by the Consumer Price Index Wednesday was 2.8% annually and was up a lower than expected 0.2% for the month, seasonally adjusted.

U.S. consumer prices increased moderately in February as higher shelter costs were partially offset by cheaper airline fares, giving the Federal Reserve room to keep interest rates unchanged next week while monitoring the economic impact of a trade war.

Economists are bracing for intensifying price pressures and slower growth, posing a challenge for the Federal Reserve.