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(The Hill) — Inflation showed more signs of cooling Friday, according to data released by the Commerce Department, keeping the Federal Reserve on track to slow down its interest rate hikes next week.

The personal consumption expenditures (PCE) price index, the Fed’s preferred gauge of inflation, was up 5 percent annually in December, down from a 5.5-percent annual inflation rate in November and a nearly 7-percent rate in June of last year.

Taking out the volatile categories of food and energy, core PCE fell to a 4.4-percent annual increase off a recent high of 5.2 percent in September.

The new inflation data comes less than a week before the Fed is expected to issue its smallest interest rate hike since March 2022. The Fed’s monetary policy committee is set to meet from Jan. 31 to Feb. 1 in Washington, D.C., and is all but certain to issue its eighth straight rate hike in consecutive meetings.

Sylvan Lane contributed to this developing story.