While the Labor Department’s consumer price index (CPI) tends to get more attention, the PCE price index is the Federal Reserve’s preferred way of tracking inflation. That makes it highly influential in the Fed’s plans for fighting inflation — and whether the central bank could drive the U.S. into recession.

The PCE price index is expected to have risen by 4.3 percent over the past year and 0.4 percent in January alone, according to consensus estimates. That would mark the seventh straight month of falling inflation.

“The underlying trend is set to slow markedly across this year as a whole and into 2024. The five drivers of the pandemic surge in inflation—global food and energy prices, the supply-chain crisis, the surge in rents, and the acceleration in wages—are now reversing, at varying rates, pointing to downward pressure on inflation for the foreseeable future,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a research note.

Even so, inflation is still more than twice the Fed’s preferred annual target of 2 percent.

Large jumps in consumer spending and take-home pay  may also soothe some recession fears but raise other concerns about how much more pressure the Fed will need to put on the economy to bring inflation back down to its goal.