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Core personal consumption expenditure inflation – the Federal Reserve's preferred measure – rose in February but remained below the Fed's 2 percent target rate, said NAFCU Chief Economist and Director of Research Curt Long, who analyzed data published by the Bureau of Labor Statistics.

In February, core PCE rose a seasonally adjusted 1.4 percent, year over year. "While the Fed's first rate hike will likely occur prior to reaching their [inflation] target, they will want to see sustained progress toward that goal," Long said in a NAFCU Macro Data Flash report.

Overall consumer prices increased a seasonally adjusted 0.2 percent in March. For the 12-month period, overall consumer price index was essentially unchanged, up from February's negative 0.1 percent annual growth rate.

Core prices (excluding food and energy costs) increased 0.2 percent in March compared to the previous month. Year-over-year core CPI grew 1.8 percent, up from 1.7 percent in February.

Energy prices increased 1.1 percent in March, following a 1 percent increase in February; from a year ago, energy prices were down 18 percent. Food prices decreased 0.2 percent in March, the first significant drop since May 2013. On a year-over-year basis, food prices were up 2.3 percent.

"After stripping out the volatile food and energy indices, core CPI inflation increased to 1.8 percent versus a year ago," Long said.