Fed's favorite core inflation measure hits 2.6% in January, as expected

Inflation eased slightly in January, with the personal consumption expenditures price index rising 0.3% for the month and showing a 2.5% annual rate, in line with Fed estimates. Fed officials are closely monitoring the core PCE measure, which increased 0.3% for the month and was at 2.6% annually. While income saw a sharp increase of 0.9%, spending decreased by 0.2%, leading to a higher personal savings rate of 4.6%. Fed Chair Jerome Powell is expected to remain cautious on interest rates as policymakers await more evidence of sustainable inflation growth.

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