Inflation slowed to a 6% rate in the year ending in February, the Bureau of Labor Statistics reported Tuesday, a welcome sign as the Federal Reserve prepares to meet for a monetary policy meeting.

The much-anticipated numbers from the consumer price index shows that, while inflation is much too high, it is cooling in response to the Fed's aggressive interest rate hikes.

Inflation had been running at 6.4% the month before. Tuesday’s report marks seven straight months of declines in annual inflation after the rate peaked at a whopping 9.1% in June.

Meanwhile, “core inflation,” which strips out volatile food and energy prices, was at 5.5% in the year ending in February.

SVB COLLAPSE: FED’S PLAN FOR RATE HIKES FALL BY THE WAYSIDE

The news comes amid heightened tensions in the financial sector after the Federal Deposit Insurance Corporation announced on Friday that Silicon Valley Bank, known as SVB, had failed and been taken into government hands, followed by crypto lender Signature Bank on Sunday. Officials provided reassurances over the weekend that the banking system was sound.

The Fed will meet next week to decide whether to raise interest rates, with some expressing concern that if it does hike rates once again, it could lead to a recession. Investors were hoping for a cooler CPI report this week so that the Fed might hold off on hiking this month given the SVB collapse.

Meanwhile, the labor market has remained red-hot despite the now-year-long series of interest rate revisions.

Last week it was announced that the economy gained 311,000 jobs in February. Job gains have consistently been strong enough to keep the unemployment rate trending down.

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The stronger jobs reports show that the Fed’s rate hikes aren’t yet having the punch officials want, and it could cause the Fed to lean toward a more aggressive monetary stance at its meeting later this month, although the SVB debacle is now pushing back on that pressure.

Fed Chairman Jerome Powell recently said that hot inflation reports and job data “suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”