The Federal Reserve’s favorite inflation thermometer just delivered a reading nobody wanted to see. The Personal Consumption Expenditures price index, better known as PCE, rose 3.8% year-over-year in April 2026, marking its largest increase since May 2023.
Core PCE, which strips out the volatile food and energy categories to give a cleaner picture of underlying price trends, climbed 3.3% on a yearly basis. That’s the highest reading since November 2023, and it sits uncomfortably far from the Fed’s 2% target.
The numbers in context
The Bureau of Economic Analysis released the data on May 28, 2026. On a month-over-month basis, headline PCE increased 0.4% while core PCE rose 0.2%.
These numbers largely matched what markets were expecting. The lack of a nasty surprise means the data is unlikely to trigger an immediate shift in Federal Reserve policy.
