The US PCE price index rose 0.3% month over month in August 2026, below the 0.4% market forecast and following a downwardly revised 0.1% increase in July. Core PCE, which excludes food and energy prices, increased 0.2%, below expectations of 0.3%, while its annual rise of 3.0% also undershot the 3.3% forecast. Headline PCE inflation held at 3.4% year over year, unchanged from July’s downwardly revised reading. The PCE price index is the Federal Reserve’s preferred inflation gauge and has remained above its 2% target since 2021. The softer core reading may reinforce expectations for interest-rate cuts and support risk assets through the prospect of easier financial conditions.