August 24, 2026
Disinflation Signal from July Core PCE Nowcast
Truflation’s latest estimate points to a 0.2% month‑over‑month increase in US core personal consumption expenditures (PCE) for July. Core PCE excludes food and energy and is closely watched as a barometer of underlying price pressures. A 0.2% monthly gain, if sustained, is broadly consistent with inflation running near the low‑2% annualized pace.
Nowcasts provide a real‑time read on inflation momentum ahead of the official release. While model‑based estimates can help frame expectations, the Bureau of Economic Analysis figure remains the benchmark for policy and markets. The focus is on whether recent monthly prints are coalescing around a slower, more stable path after earlier volatility.
The composition of core PCE matters for the policy narrative. Services categories tied to housing and wages have been central to the persistence of inflation, while goods prices have generally been less pressured as supply chains normalized. A steady 0.2% monthly rate would suggest incremental progress on these fronts without re‑acceleration.
Policy Outlook: Truflation Sees No Further Hikes in 2026
Alongside the nowcast, Truflation indicated it does not expect the Federal Reserve to raise interest rates again this year. The Federal Reserve’s framework emphasizes data dependence and a dual mandate of price stability and maximum employment. In that context, a run of 0.2% core PCE increases would tend to support patience, allowing additional data on inflation breadth, labor markets, and activity to accumulate before any policy adjustment.
Market attention remains trained on the interaction between inflation trends and real interest rates. As inflation cools and policy rates remain restrictive in real terms, the balance between the risk of doing too much versus too little is central to the Fed’s reaction function. Absent signs of renewed price acceleration, the bar for additional tightening is typically higher; conversely, any upside surprise in core inflation would quickly reset expectations.
What to Watch
The upcoming official PCE release will test the 0.2% nowcast against observed data. Within the report, measures of trimmed‑mean or median inflation, services ex‑housing momentum, and the distribution of price changes across categories will help gauge whether disinflation is broadening. Subsequent communications from policymakers will shape the rates path into year‑end.
For precious‑metals investors, the path of inflation relative to policy rates informs real yields, a key driver of gold and silver valuations; in periods of macro uncertainty, some investors prefer allocated physical ownership held off‑exchange in secure vaults.
