NEW YORK, March 12 Reuters U.S. consumer prices increased solidly in February amid higher costs for gasoline and shelter, suggesting some stickiness in inflation that could delay an anticipated June interest rate cut from Federal Reserve.

The consumer price index CPI rose 0.4 last month after climbing 0.3 in January, the Labor Department said on Tuesday. Gasoline and shelter, which includes rents, contributed more than 60 to the monthly increase in the CPI. In the 12 months through February, the CPI increased 3.2, after advancing 3.1 in January.

Economists polled by Reuters had forecast the CPI gaining 0.4 on the month and increasing 3.1 yearonyear.

MARKET REACTION

STOCKS U.S. stock index futures extended a gain to up 0.45

BONDS U.S. Treasury yields were mixed after the data, with 2year note yield last a tick lower at 4.548, and the 10year yield up slightly at 4.112 FOREX The dollar index added a bit and was 0.136 firmer

COMMENTS

MELISSA BROWN, MANAGING DIRECTOR, APPLIED RESEARCH, SIMCORP, NEW YORK

Inflation was a little hotter than expected, particularly core inflation which is still significantly above the 2 target. The market seems to be shrugging it off which is a little surprising.

Weve got a tradeoff. If the Fed has to cut aggressively its because the economy isnt doing so well. So the flip side of that is that the economy is strong. We may still have inflation but .. maybe the market is a little more focused on the idea that a soft landing is looking less…