Inflation is slowing, a fresh reading of the Federal Reserve’s preferred index showed, but costs continue to climb rapidly after stripping out volatile food and fuel — which shows that price pressures retain staying power and it could be a long road back to normal, the New York Times reported. The Personal Consumption Expenditures index climbed by 4.2 percent in the year through March, down notably from 5.1 percent in the year through February. But after stripping out food and fuel prices, a closely watched “core” index held nearly steady last month. That measure rose by 4.6 percent over the year, compared with 4.7 percent in the previous reading — a figure that was revised up slightly. The data provide further evidence that inflation is moderating, but that the process remains bumpy and could take a long time to fully play out. Fed officials have raised interest rates sharply over the past year to make money more expensive to borrow and slow demand, and those moves are only slowly trickling through the economy and weighing down price increases. The central bank meets on May 3 to make its next policy decision, and officials are widely expected to raise rates by a quarter percentage point to just above 5 percent. Markets will be just as focused on what they signal for the future: Central bankers forecast in March that they might stop lifting interest rates after their next adjustment. Both incoming price and wage data and financial news could inform whether they feel comfortable hitting pause.
