The U.S. Consumer Price Index (CPI) rose 0.4% in February, leaving it up 1.7% over the last 12 months, in line with economists' expectations, a Labor Department report Wednesday showed.

The 12-month rate represents an acceleration from January's 1.4% clip, a pickup partly driven by higher gasoline prices, which rose 6.9% in February, accounting for over half of the seasonally adjusted increase in the all-items index, according to the Labor Department's Bureau of Labor Statistics.

Core CPI, which excludes food and energy prices, rose 0.1% in February, the report showed. That level was just below economists' average estimate of 0.2%, according to FactSet.Sub-indexes for shelter, recreation, medical care and motor vehicle insurance all increased in February.The energy index rose 3.9%.The index for airline fares continued to decline in February, falling 5.1% as consumers traveled less during the pandemic.

Pantheon's chief U.S. economist, Ian Shepherdson, wrote in a note to clients:

Rising inflation is closely watched by bitcoin (BTC) traders because a growing number of investors see the largest cryptocurrency as a hedge against higher prices. Federal Reserve Chairman Jerome Powell has suggested that inflation will rise in the coming months but the increase will likely be temporary.

Robert Frick, corporate economist at Navy Federal Credit Union, wrote in emailed comments that "inflation continues to be subdued, but that will change."

"Last spring, when prices dropped as the economy sank into its deepest recession, we wished for times when inflation would return, and return even higher than the weakening economy in 2020 was showing. Those times should be here in a few months," according to Frick.