Key Takeaways Inflation cooled in January, according to Personal Consumption Expenditures, the Federal Reserve's preferred measure of inflation.Inflation rose 2.5% over the year in January compared to 2.

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.