The Federal Reserve’s preferred measure of underlying inflation accelerated in October from a year ago, helping explain policymakers’ more cautious approach to lowering interest rates.

The Commerce Department released data showing that PCE inflation ticked higher in October, though the Federal Reserve's preferred inflation gauge remained near last month's level.

Markets focus on the core PCE inflation reading, which the Fed considers a more accurate representation of overall price pressures, as it incorporates changes in consumer spending

The Federal Reserve cut interest rates by 50 basis points in September and followed up with another reduction of a quarter percentage point in November. Steve Sosnick, Interactive Brokers chief strategist,

The Fed has lowered interest rates by a total of 75 basis points over its last two meetings, but further rate cuts may be sparse.

Powell just a week after the meeting said the economy was "not sending any signals that we need to be in a hurry to lower rates."