Reasoning
Given the core PCE at 3.2% as of June 2026 and the Federal Reserve's indication of a measured approach to future rate adjustments, there is underlying upward pressure on inflation. The June 2026 SEP projects the funds rate at 3.8 percent by year-end, which may not sufficiently curb inflation if consumer demand remains robust. Thus, there's a substantial chance that core PCE could exceed 3.2% in the latter half of 2026.Key uncertainty
The potential impact of unexpected changes in consumer spending patterns, particularly in response to fiscal policies or global economic shifts, could significantly influence PCE outcomes.