New data released Tuesday by the Labor Department showed inflation cooling off slightly in February but remaining well above where the Fed would ideally like it to be.

Consumer prices rose by 0.4 percent in February and 6 percent over the past 12 months, largely in line with what economists had been expecting, according to consumer price index (CPI) data. The 6 percent annual inflation rate was the lowest yearly price increase since September 2021, down from 6.4 percent in January and a high of 9.1 percent last June.

With inflation fading but still high, the Fed appears almost certain to raise its baseline interest rate range by 0.25 percentage points, a plan officials have signaled since February. But the meltdowns of Silicon Valley Bank and Signature Bank over the weekend raised some doubts about whether the Fed could afford to plow ahead.

The dual bank collapse prompted concerns among some market participants about whether the Fed had already dialed up enough pressure on the economy.

The combination of swift federal action to protect deposits at both failed banks and the Tuesday inflation report seemed to put the Fed back on course toward a hike.

“We have long argued that the one thing that would stop the Fed from raising rates was a crisis. If the current crisis proves transitory, the Fed will resume rate hikes,” wrote Diane Swonk, chief economist at KPMG, in a Tuesday analysis.

“Otherwise, we may be in for a harder landing.”