CPI registers its first sub-5% reading in two years. Core inflation has also moderated, to 5.5%.

In February, housing costs helped deliver a larger-than-forecast 0.5% gain in so-called core inflation, which excludes food and energy

But employment is still too high for the Fed.

Hiring unexpectedly surged, and the nation's unemployment rate fell to a 53-year low.

The Fed is expected to dial back interest-rate hikes to a quarter-point move next week, but inflation remains well above their 2% goal.

U.S. inflation data suggests price pressures have peaked, giving financial markets hope that the Federal Reserve's interest-rate hikes will soon pause.

The labor shortfall that has troubled employers since the pandemic hit became even more acute last month, as more Americans dropped out of the workforce.

However, there's still a long way to go before high inflation becomes history.