Inflation decelerated but people are spending less and saving more as prices keep rising and wage growth slows. It’s worrying news for the Fed and economy.

The U.S. dollar edged lower on Friday following two straight days of gains, after a reading on inflation was largely as anticipated by investors while consumer spending unexpectedly fell. The Personal Consumption Expenditures (PCE) price index increased 0.

U.S. consumer spending unexpectedly fell in January, but a pick up in inflation could provide cover for the Federal Reserve to delay cutting interest rates for some time. Consumer spending, which accounts for more than two-thirds of U.