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Core PCE price index

Core PCE price index is up 3.1% from a year ago and has held roughly steady over the last 3 months. That is high by historical standards: higher than 85% of readings since 2006.

Latest (vs. a year ago)

3.1%

As of

Sep 2026

3-month change

+0.08 % pts

1-year change

+0.30 % pts

20-year percentile

85th

20-year median

1.8%

Monthly averages, last 20 years. Shaded band = the middle half of readings.

What it is. The Fed's preferred inflation gauge (target 2%). A higher reading means more inflation pressure in the Inflation reading. Shown as the change from a year earlier.

What it affects next

Core PCE price index is unusually high: 3.1%, 85th percentile of the last 20 years. Here is what has tended to follow, based on links the data backs up.

→Fed funds rate: has tended to rise about 1 month later. Following
It is: +25 bps over 3 months. Link strength 0.44.
→3M Treasury bill yield: has tended to rise in the same month. Following
It is: +45 bps over 3 months. Link strength 0.98.
→Avg interest rate on federal debt: has tended to rise about 4 months later. Watch
If history repeats, watch for it around March 2027. Link strength 0.88.
→Yield curve (10Y minus 3M): has tended to fall in the same month. Not following yet
So far it is moving the other way (+1 bps over 3 months), which is worth watching. Link strength 0.84.
→2Y Treasury yield: has tended to rise in the same month. Following
It is: +71 bps over 3 months. Link strength 0.82.

What is driving it

None of its tested drivers is moving much right now.

All tested links

Core PCE price indexdrivesFed funds rateData agrees
The Fed targets 2% core PCE; persistent overshoots push rates higher. Typical lag: months. Strongest match 1 month later (correlation 0.44, 369 observations since 1996).

Source: BEA via FRED (series PCEPILFE).