The Federal Reserve’s preferred inflation metric rose at a stubborn pace in February and household demand was weaker than expected, illustrating a more guarded consumer amid growing concerns about finances.

The Fed has been keeping its main interest rate on hold this year after cutting it sharply in late 2024, in part because of worries about inflation remaining higher than its 2% target. While more cuts to interest rates would give the economy and financial markets a boost, they would also put upward pressure on inflation.

By Noel Randewich and Pranav Kashyap (Reuters) -Wall Street stocks tumbled on Friday, with sharp losses in technology heavyweights Amazon and Microsoft, after U.S. data stoked fears of weak economic growth and high inflation as the Trump administration ratchets up tariffs.

Wall Street tumbles following discouraging updates on US shoppers and inflation. See where the markets are right now.

However, the Commerce Department announced Friday that the Fed's key inflation measure expanded more than expected in February, as the growth in personal consumption expenditures put the 12-month inflation rate at 2.8%. Economists surveyed by Dow Jones had been expecting numbers closer to 0.3% for PCE and only 2.7% for the inflation rate.

The Commerce Department released the February personal consumption expenditures (PCE) index which showed that inflation remains above the Federal Reserve's 2% goal.