By Ovunc Kutlu
ISTANBUL (AA) - The US Federal Reserve's preferred inflation indicator softened in February on an annual basis, according to Commerce Department figures released Friday.
The core personal consumption expenditures (PCE) price index rose 2.8% annually in February, down from the 2.9% year-on-year gain in January, and came in line with market expectations.
On a monthly basis, the core PCE price index rose 0.3% in February, also decelerating from a 0.5% monthly increase in January, and coming in line with market estimates.
"Prices for goods increased 0.5 percent and prices for services increased 0.3 percent," the Commerce Department said in a statement. "Food prices increased 0.1 percent and energy prices increased 2.3 percent."
The PCE price index, which includes food and energy prices, annually rose 2.5% in February, following a 2.4% year-on-year gain in January, also coming in line with market estimates.
That index, on a monthly basis, rose 0.3% in February, softening from a 0.4% month-on-month gain in January, and managing to come lower than the market expectation of 0.4%.
The softening figures could allow the Fed to begin interest rate cuts this summer.
The Fed has made a total of 11 interest rate increases between March 2022 and July 2023 to tame record inflation, carrying the federal funds rate to the 5.25%-5.5% target range – the highest in 22 years.
The central bank skipped four rate hikes last year, and two more this year, while its first rate cut is expected on June 12.