Inflation indicators that the Federal Reserve is focused on rose slightly less than expected in February, giving some hope that rising interest rates are helping to moderate rising prices.
The price index of personal consumption expenditures excluding food and energy rose 0.3% for the month, the Commerce Department reported on Friday. The reading was below the Dow Jones estimate of 0.4% and lower than January's 0.5% gain.
On a 12-month basis, core PCE rose 4.6%, a slight decrease from January's level. Including food and energy, headline PCE rose 0.3% monthly and 5% annually, compared to 0.6% and 5.3% in January.
Different data, personal income rose 0.3%, slightly above the estimate of 0.2%. Consumer spending rose 0.2%, compared to estimates of 0.3%.
Stock market futures remained high following this report.
The Fed's unofficial projections released last week showed the possibility of one more increase this year and no reduction. However, investors expect a cut this year, with the year-end price for the federal funds rate at 4.25%-4.5%, half a point below the current target range.
Although inflation has receded in some areas, it remains an impact in some areas. Inflation is likely to remain above the Fed's 2% target in 2024, and officials say they remain focused on lowering prices even in the current banking crisis.
Data released Thursday indicated that problems in banking may also be at least under control. Borrowings through the Fed's two emergency lending programs fell slightly in the past week, suggesting there is no rush of liquidity for banks that may be short of capital.
