The Federal Reserve’s preferred inflation gauge cooled as expected in January; however, the good news came with a red flag for the US economic engine: Consumers pulled back their spending by the most in nearly four years.

The Federal Reserve's key inflation gauge, the PCE price index, offers hope as the S&P 500 hits turbulence amid Trump tariff threats.

The Federal Reserve’s preferred measure of underlying inflation rose at a mild pace in January, offering some relief after a string of reports suggested price pressures are heating up again, while consumers pulled back on spending.