The United States’ core Personal Consumption Expenditures (PCE) price index inched higher in the fourth quarter of 2025, rising to 2.9% from 2.8% in the third quarter of 2025. The data, updated on 20 February 2026, point to a marginal re-acceleration in the Federal Reserve’s preferred inflation gauge after signs of gradual cooling earlier in the year.
The move from 2.8% to 2.9% suggests inflation remains close to, but still above, the Fed’s 2% target, underscoring that price pressures have not fully normalized. While the change is modest, it could factor into market expectations around the future path of interest rates, with investors weighing whether the slight uptick signals persistent underlying inflation or a temporary fluctuation within a broader disinflation trend.
