Argus

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May 27, 2026

Market Outlook

Bullish

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Short

Summary

The Fed's favorite inflation indicator, the PCE Price Index (PCE), will be released by the Bureau of Economic Analysis (BEA) on Thursday. The PCE differs from the better-known Consumer Price Index (CPI) as its composition changes more frequently and is quicker to reflect real-time pricing. In the last report, through March, PCE inflation reportedly increased at a 3.2% rate year over year. By comparison, the latest CPI report, through April, had overall inflation rising 3.8%. Core PCE, which excludes volatile food and energy prices, had risen at an annual rate of 3.2% in the last report. Our PCE forecasts call for slightly higher readings for April: 3.8% for the headline number and 3.3% for the core reading, driven by the fall-out from higher energy prices due to the Iran war. This trend is evident in the Producer Price Index (PPI) report: farther up the value chain, producer prices are rising at accelerated rates even approaching 20%. Expectations are changing as well: the three-year outlook for inflation is now 2.8%, versus 2.3% two months ago. Overall, inflation in this cycle peaked in summer 2022 and, prior to the war, had been on a downward trek. We track 20 inflation measures on a monthly basis. On average, they are indicating that prices are rising at a 4.7% rate year over year, up 110 basis points co

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