Inflation ticked up to 2.7% for the year ending in March, as measured by the personal consumption expenditures price index, which is the gauge favored by the Federal Reserve.
The rise in headline inflation reported Friday morning by the Bureau of Economic Analysis is bad news for the Fed, which is working to quash inflation by keeping interest rates elevated. The consensus among economists was that PCE inflation would punch in at 2.6%. The Fed’s target is 2% inflation in the PCE index.
From February to March, inflation rose 0.3%, about in line with forecast expectations.
Core PCE inflation, a measure of inflation that strips out volatile energy and food prices, rose to a 2.8% year-over-year rate.
The news comes a day after the gross domestic product report, which showed that economic expansion fell well short of expectations in the first quarter of the year. The economy expanded at a 1.6% seasonally adjusted annual rate
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