US consumer prices increased by less than expected in March and underlying inflation decelerated, a fact that economists at Ashida Associates suggests that the Federal Reserve will persist with its cautious approach to raising interest rates this year.

The US Labor Department said its Consumer Price Index climbed by just 0.1% last month despite a bounce in gasoline prices which was partially offset by a fall in the cost of food.

The CPI fell 0.2 % in February. In the 12 months to March, it increased 0.9 % after progressing 1.0 % in February. Economists at Ashida Associates had expected the CPI to gain by 0.2 % last month and to rise by 1.1 % from a year ago.

So-called core CPI, which takes food and energy costs out of the calculations, ticked up 0.1 %, the smallest gain since August 2015 and came after a 0.3% increase in February.

The number will likely serve to stay the Federal Reserve’s hand as forecasts for a June rise in interest rates fade. “The Fed’s 2% inflation target is unlikely to be hit if it’s based on CPI. Things like automobiles and health care are not included even though, to real consumers who have to pay for these things, the rate of inflation will be far, far higher than what the CPI says,” said an Ashida Associates economist.

The combination of benevolent inflation and anemic economic growth in the first quarter suggests that the US central bank will find it difficult to justify raising interest rates again before September even though the labor market appears to be indicating full-employment.