The Commerce Department will release its Personal Consumption Expenditure Price Index for April on Thursday morning, giving investors their next look at the Federal Reserve’s preferred measure of inflation just as markets are pressing to fresh highs. The report lands after a month in which headline consumer prices and producer prices both moved higher, keeping the question of whether inflation is cooling or reaccelerating at the center of trading.
In March, the headline PCE Price Index rose 3.5% from a year earlier, while core PCE, which strips out volatile food and energy costs, increased 3.2%. Those readings remain well above the Fed’s 2% inflation target and leave little margin for error if April brings another strong print. The PCE measure is watched closely because it is broader than the consumer price index and tends to reflect changes in what households buy more quickly as prices shift.
Analysts say the April pce report could be complicated by a fresh burst in oil costs tied to the ongoing war in the Middle East. That has raised the chance that inflation comes in hotter than expected. The Cleveland Federal Reserve’s Inflation Nowcasting model points to an April headline PCE reading of 3.81% and core PCE at 3.31%, with May expected to rise further to 4.06% and 3.36%, respectively.
The coming data matters because it arrives after a run of stubbornly firm price reports. In April, CPI rose 3.8% year over year and core CPI rose 2.8%, while PPI jumped 6%. Those numbers have already helped push bond yields sharply higher in recent weeks, and Goldman Sachs warned that rising yields, combined with a slowing economy or inflationary pressures, could trigger a stock market correction.
That warning hangs over a market that has been defying it. Both the S&P 500 and the Nasdaq Composite set new highs this week, extending a rally that began in April 2025. The next few inflation updates will be critical to whether that climb can continue, and Thursday’s PCE reading may decide whether investors keep betting on cooling prices or start preparing for a tougher path ahead.
