Investing.com -- A measure of inflation closely watched by the Federal Reserve slowed on a monthly basis in March, as the U.S. central bank is widely tipped to raise interest rates by a quarter percentage point at its next policy meeting.
The personal consumption expenditure index moved higher by 0.1% during the month, down from the 0.3% registered in February and estimated by economists. Annually, the number slowed to 4.2% from 5.1%.
Excluding volatile items like food and energy, the PCE index increased by 0.3% in March, in line with the prior month and meeting economists' projections, according to Commerce Department data on Friday.
On a year-on-year basis, the core reading moved down to 4.6% from an upwardly revised mark of 4.7% in February, but topped estimates of 4.5%. The Fed uses the PCE price indexes, which gauge how much consumers are paying for goods and services, for its 2% inflation target.
The Fed has raised interest rates at an unprecedented clip over the past year in a bid to corral runaway inflation.
However, the uptick in borrowing costs is starting to show signs that it is hitting overall growth. U.S. economic activity decelerated by more-than-anticipated to 1.1% in the first quarter due in large part to rising rates and high inflation.