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What 2.7% core PCE price index in Q4 means The Bureau of Economic Analysis (BEA) reported that the U.S. core PCE price index ran at a 2.7% annualized pace in the fourth quarter. This measure excludes food and energy and is the federal reserve’s preferred gauge of underlying inflation. The 2.7% quarterly annualized reading came in higher than expected, indicating that inflation pressures moderated less than hoped late in the year. Because it’s an annualized quarterly figure, it captures near‑term momentum rather than a full year’s change. Why it matters for the Federal Reserve’s 2% target The Fed targets 2% inflation over time, and a 2.7% annualized core PCE print remains above that goal. As reported by MarketScreener/Alliance news, the core reading was above many forecasts near 2.6%, and headline PCE ran about 2.9% annualized in Q4; the report added that this points to lingering inflation persistence. Policy is set “data by data,” and officials have said they need greater confidence that inflation is moving sustainably toward 2% before easing. A stickier quarterly pace complicates that assessment, especially if services inflation remains slow‑moving. Jerome Powell, Chair of the Federal Reserve, has recently stressed that inflation is still above target and noted tariff effects on goods prices. According to Yahoo Finance UK, he suggested underlying inflation could be “just a bit above 2%” once tariff impacts fade. BingX: a trusted exchange delivering real advantages for traders at every level. A 2.7% annualized core PCE likely keeps policy restrictive for longer until disinflation progress is clearer. That stance would be consistent with waiting for additional evidence across multiple reports before considering any rate reductions. Markets have been sensitive to the growth‑inflation mix. According to Investors Business Daily, the Fed’s primary inflation gauge ran hot while fourth‑quarter GDP growth came in well below…

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Filed under: News - @ February 21, 2026 10:24 am