Aug 2025 PCE Inflation Estimate

On Friday at 8:30 am ET, we will get the Aug PCE inflation, which will be an important piece of information in determining what the Fed does next. Some Fed officials, like Miran and Kashkari, are expecting more rate cuts this year, but some others, like Musalem, Hammack, and Bostic, think there will be no more rate cuts in 2025. Depending on what they see in the Aug PCE inflation data, some of them might change their view either way.

Since I started publishing my PCE estimates in Mar 2024, my average error for forecasting headline PCE has been an almost perfect -0.5 bps (-0.005 pp).

My average error for forecasting core PCE is -0.7 bps (-0.007 pp).

My Jul PCE estimates were perfectly in line for headline PCE at +0.20% MoM and almost perfectly in line for core PCE at +0.26% MoM, which was -1 bp below the actual +0.27% MoM.

All of my public PCE estimates were published here on Substack and can be accessed directly on the Arkomina Research Substack profile or the following website: www.ArkominaResearch.com.

Aug PCE is important because it can determine what the Fed does in Oct. So, where will it print?

My Aug PCE inflation estimates are…