PCE Inflation Stays Elevated

The latest report from the U.S. government on PCE inflation came in at 2.8% (YoY). Based on the recent data, inflation is not rising, but it is also not falling. At 2.8%, inflation is still well elevated above the Federal Reserve's target of 2%. However, the fact that it is not rising, allows the Federal Reserve to cut rates in December 2025.

One thing to note, the transparency in the U.S. government data continues to be suspect. It is being politicized more and more. This means investors are less and less likely to trust it, instead watching prices themselves.

Consumers continue to struggle with inflation and it is remains one of the highest worries.