U.S. inflation rate surges to 6.6%, PCE index shows, but prices might also be peaking

The Federal Reserve’s preferred measure of inflation rose a sharp 0.9% in March, but the increase largely stemmed from a surge in the cost of gas and there were some signs that intense price pressures could be starting to ease.

Over the past 12 months, the personal consumption price index has climbed 6.6%, up from 6.4% in February, the government said Friday. That’s the steepest increase since 1981.

Yet a narrower measure of inflation that omits volatile food and energy costs, known as the core PCE, rose by just 0.3% in March for the second month in a row. That matched the Wall Street forecast.

The increases in the core rate of inflation in February and March were the smallest back-to-back readings since last summer.

What’s more, the rate of core inflation in the past year slipped to 5.2% from 5.3%, marking the first month-to-month decline in more than a year.