The central bank’s preferred inflation measure, released on Friday, climbed 2.5 percent in January from a year earlier, slightly lower than the previous reading of 2.6 percent but still well above the Fed’s 2 percent target. On a monthly basis, prices increased 0.3 percent, in line with December’s pace.

Inflation rose 2.5% over the year in January compared to 2.6% in December, marking the first decrease in four months.

New data may point to emerging tension between the U.S. Federal Reserve's dual inflation and employment goals, as price pressures remained sticky in January while consumer spending slowed more than expected.

Inflation showed a modest decline in January, even as concerns grew over President Donald Trump’s proposed tariffs. The personal consumption expenditures (PCE) price index, which serves as the Federal Reserve’s preferred inflation gauge,