The Personal Consumption Expenditures (PCE) Price Index rose by 0.3% last month, reported the Bureau of Economic Analysis of the Department of Commerce on Friday. Data for January was revised upward to show an increase of 0.4%, instead of 0.3%.

U.S. prices increased moderately in February, and the cost of services other than housing slowed considerably, keeping a Federal Reserve interest rate cut on the table for June.

The Personal Consumption Expenditures (PCE) Price Index rose by 0.3% last month, reported the Bureau of Economic Analysis of the Department of Commerce on Friday. Data for January was revised upward to show an increase of 0.4%, instead of 0.3%.

Over the 12 months through February, PCE inflation advanced by 2.5% after rising 2.4% in January. Economists surveyed by Reuters had forecast the PCE price index to rise by 0.4% for the month and by 2.5% year-on-year.

Price pressures are easing, although the pace has slowed compared to the first half of last year.

Last week, Federal Reserve officials kept the U.S. central bank’s interest rate unchanged in the current range of 5.25%-5.50%, after raising it by 525 basis points since March 2022.

Monetary policymakers anticipate three interest rate cuts this year. Financial markets expect the first reduction in June. Fed Governor Christopher Waller said on Wednesday that “there is no rush to cut interest rates” right now, but he did not rule out cutting borrowing costs later in the year.

Excluding volatile food and energy components, the PCE price index increased by 0.3% last month. The rise followed an upward revision to 0.5% in January. The so-called core PCE price index had advanced by 0.4% in January.

Core inflation was at 2.8% year-on-year in February, down from 2.9% in January. The Fed tracks PCE price measures to achieve its 2% inflation target. Monthly readings of 0.2% are needed for inflation to return to target.

PCE services inflation, excluding energy and housing, rose by 0.2% last month, following January’s 0.7%. Monetary policymakers closely monitor core inflation to assess their progress in fighting inflation.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose by 0.8% last month after a 0.2% increase in January, the report also showed.