US PCE Nowcast – Headline inflation will creep above 4%
Inflation pressures are rising due to energy costs and supply shortages. Discover how these trends may impact the economy and potential rate cuts.
Headline inflation is projected to rise above 4%, driven by increasing energy prices and higher portfolio management fees. The year-over-year headline PCE inflation is estimated to reach 4.1%, the highest since April 2023, while core PCE inflation is expected to climb to 3.4%.
Looking ahead, persistent high costs in fertilizers and transportation, influenced by geopolitical tensions, will likely elevate food prices. Additionally, a shortage of computer memory chips will keep core goods inflation elevated amid ongoing demand for AI infrastructure.
Despite these pressures, the Federal Reserve may consider a rate cut due to disinflationary trends in services and a stable labour market. The forecast indicates that inflation will remain elevated throughout the year, with core PCE expected to outpace core CPI due to differing weights in the indices.
Download the report for more detailed insights.
You might also be interested in
This report was brought to you by the Macro team
Reliable and consistent economic forecasts, analysis, models and scenarios provide the insight necessary to make informed decisions in a fast-changing world.
