FX.co ★ US PCE Inflation Set to Remain Well Above Fed Target

The US PCE price index is projected to increase 0.3% month over month in January 2026, easing slightly from December’s 0.4% gain. The core PCE index, which excludes food and energy, is expected to rise 0.4%, matching the prior month’s pace. On a year-over-year basis, headline PCE inflation is likely to remain unchanged at 2.9%, while core PCE is seen ticking up to 3.1% from 3.0%. As the Federal Reserve’s preferred inflation gauge, the PCE price index is anticipated to show that the disinflation trend is losing momentum, with price pressures still running persistently above the Fed’s 2% target.