The Federal Reserve's preferred measure of inflation hit its 2% target for the first time in nearly five years, according to Department of Commerce data.

The personal consumption expenditures deflator — a measure of prices — increased by 2.1% year-on-year in February, in line with economists' expectations. It rose 0.1% month-on-month.

In March, the Fed raised interest rates and signaled two more increases this year based on confidence that the economy was doing well and inflation was advancing toward its target.