Inflation Edges Towards Fed Target

The Personal Consumption Expenditures (PCE) Price Index, declined to 2.4% on a yearly basis in January. It is the lowest reading in nearly three years. PCE is a measure of inflation from the U.S. Bureau of Economic Analysis. This reading followed the 2.6% increase recorded in December and was in line with market expectation. The Core PCE Price Index, which excludes food and energy prices, rose 2.8% on a yearly basis, matching analysts' estimate. The PCE Index weighs heavily in Federal Reserve considerations regarding interest rates. The Fed maintains a goal of 2% inflation.