2026.02.2013:30:00UTC+00US Core PCE Inflation Ticks Up to 2.9% in December, Nudging Further Above Fed’s 2% Target

The US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, edged higher to 2.9% year-over-year in December 2025, up from 2.8% in November 2025. The data, updated on 20 February 2026, show a modest acceleration in price growth as measured against the same month a year earlier.

The December reading underscores that while inflation has eased substantially from its earlier peaks, it remains above the Fed’s 2% target. The “previous” figure reflects November’s 2.8% annual change compared with November a year earlier, while the “actual” December figure compares prices to those of December a year before. This slight uptick will likely keep markets focused on how quickly the Fed can shift toward easier policy without reigniting broader price pressures.

For investors, the latest PCE print may temper expectations for imminent rate cuts, as policymakers weigh a still-firm inflation backdrop against signs of cooling in other parts of the economy. Market participants will be watching upcoming inflation and labor data closely for confirmation that December’s move is a blip rather than the start of a renewed upward trend in price growth.