Washington - The increase in U.S. consumer prices eased again in February, the Labor Department reported Tuesday, dropping to 6% over the last year, the slowest annualized jump since September 2021.

The favorable data, however, leaves open the question of what policymakers at the Federal Reserve might do about the central bank's benchmark interest rate when they meet next week and consider inflation, as well as the collapse of three banks in recent days.

With inflation easing, analysts have been predicting the Fed could increase the interest rate, which ripples through the U.S. economy with higher borrowing costs for both businesses and consumers, by only another quarter percentage point - the same as last month, when it pushed the rate to between 4.5% and 4.75%.

But the higher interest rates the central bank has been imposing over the last year played a negative role in the declining fortunes of the banks, which could influence the Fed's decision making.

Moody's Investors Service on Tuesday revised its outlook on the U.S. banking system from "stable" to "negative," saying that depositor runs for cash in their accounts at Silicon Valley Bank, Silvergate Capital and Signature Bank have sparked fears of broader problems in the U.S. banking system and a crisis of confidence for both investors and depositors.

Unlike some analysts, Moody's said it expects the Federal Reserve to continue its tightening monetary policy, by again raising interest rates next week.

Asian markets fell sharply on Tuesday in reaction to the bank failures, but three main U.S. stock indexes rose Tuesday on news of the easing inflation rate.

The 6% annualized increase in the U.S. consumer price index was down from the 6.4% gain in January. Prices rose .4% in February compared to a .5% gain in January, the Labor Department reported.

"Today's report shows annual inflation is down by a third from this summer at a time when the unemployment rate remains near a 50-year low," U.S. President Joe Biden said in a statement.

"As I've long said and as challenges in the banking sector remind us, there will be setbacks along the way in our transition to steady and stable growth," Biden said. "But we face these challenges from a position of strength. More than 12 million jobs have been created since I took office and the share of working-age adults in jobs or looking for work is the highest it has been in 15 years."

Biden on Monday sought to reassure Americans that the U.S. banking system is secure and that taxpayers would not bail out investors.

'Americans can have confidence the banking system is safe. Your deposits are safe,' Biden said in a five-minute statement delivered at the White House.

He said customers' deposits will be covered by funds banks routinely pay into a U.S. government-held account for such emergencies.

Biden vowed, 'We must get a full accounting of what happened' at the two banks.

Despite the assurances, U.S. banks lost about $90 billion in stock market value on Monday as investors feared additional bank failures. The biggest losses came from mid-size banks of the size of Silicon Valley Bank.

While shares of the country's biggest banks - such as JP Morgan Chase, Citigroup and Bank of America - also fell Monday, the sell-off was not as sharp. The huge banks have been strictly regulated since the 2008 financial crisis and have been repeatedly stress tested by regulators.

Biden ignored reporters' questions Monday about the cause of the U.S. bank failures, but financial experts say both banks were affected by a rise in interest rates, which cut the market values of significant portions of their assets, such as bonds and mortgage-backed securities.

Banks don't lose money if they hold such notes until maturity. But if they must sell them to cover depositor withdrawals, as was the case in recent days, the losses can quickly mount.

The Federal Deposit Insurance Corp. reported that industrywide, U.S. banks at the end of last year reported $620 billion in such paper losses caused by rising interest rates.

The Federal Reserve announced Monday that it would review its oversight of Silicon Valley Bank in the wake of the bank's failure.

'We need to have humility and conduct a careful and thorough review of how we supervised and regulated this firm and what we should learn from this experience,' said Fed Vice Chair for Supervision Michael Barr.

The FDIC, which insures deposits up to $250,000 and supervises financial institutions, said Monday it transferred all Silicon Valley Bank deposits to a so-called 'bridge bank.' The new bank is run by a board appointed by the agency until it can stabilize operations.

The Bank of England also announced Monday the sale of Silicon Valley Bank's United Kingdom subsidiary to HSBC to stabilize the bank, 'ensuring the continuity of banking services, minimizing disruption to the U.K. technology sector and supporting confidence in the financial system.'

The actions were prompted by the failure of Silicon Valley Bank, which U.S. regulators seized on Friday after concerns about the bank's financial health led to a large number of depositors withdrawing their money at the same time.

With about $200 billion in assets, Silicon Valley Bank's failure was the second largest in U.S. history. The bank was heavily involved in financing for venture capital firms, especially in the tech sector.

Signature Bank also had a large portion of clients in the tech sector, including cryptocurrency. Its failure, with more than $100 billion in assets, was the third largest in U.S. history, behind Washington Mutual and Silicon Valley Bank.

Some information for this story came from The Associated Press, Agence France-Presse and Reuters.