Jul 2025 PCE Inflation Estimate

On Friday, we will get the Jul PCE Inflation, which would be another piece of the puzzle in determining Fed actions going forward. Depending on what we get on Friday, PCE inflation could determine whether the Fed cuts in Sep, but also what it does after Sep.

Since I started publishing my PCE estimates in Mar 2024, my average error for forecasting headline PCE has been an almost perfect -0.6 bps (-0.006 pp).

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

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.

Jul PCE is important because it could determine how many cuts the Fed does this year. So, where will it print?

My Jul PCE estimates are…

• Headline PCE

  • +0.2% MoM and +2.7% YoY

• Core PCE

  • +0.3% MoM and +3.0% YoY

If we get these numbers, this will likely support a cut in Sep. However, Jul numbers might not tell the Fed what to do after Sep. For that, the Fed will need to wait for the Aug employment and inflation data.

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