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Informed consensus around Core PCE

Published on June 11, 2026

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By

Gerard MacDonell

Now having a decent sample, I calculate an informed consensus that the Core PCE Price Index will be up 35 bps in May. Eight bps of this is due to portfolio management and advisory fees. I am inclined to strip out those 8 bps entirely, although I realize some others might be hesitant to follow me on that.

And then I would chop off another 2 bps for the fact that the lagging government measures of average rents are running above my proxy of marginal rent inflation, which is 1.5%. Strictly speaking, that gap is worth closer to 3 1/2 bps on the month, but I am less inclined to ignore the government data entirely, for reasons I have been over. Instead, I choose roughly to split the difference.

That gets me to 25 bps or 3% (ar) sequentially during May. My point here is not that this is correct, although I bet it is close. Rather, the informed consensus would accept this as roughly a fair assessment, subject to a minor quibble about the financial services effect.

This would be the sixth month in a row of baddish to bad inflation figures. And yet another example of how the Core CPI and even back of the envelope attempts to find its underlying signal can be extremely misleading. You really do have to go the spreadsheets — or follow the experts who do.

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