Pce release Friday could be a big day for markets
The Bureau of Economic Analysis will publish the Personal Consumption Expenditures Price Index on Friday morning, Feb. 20, at 8: 30 a. m. ET, and the pce release could move markets by shaping expectations for Federal Reserve policy. Recent data for December showed elevated readings, making this publication a closely watched indicator for investors and policymakers alike.
What traders should watch Friday
The PCE release arrives about an hour before the market opens, placing it squarely in the window to influence trading at the open. Markets have reacted to recent inflation readings, and this release will be evaluated alongside last week’s consumer price data. Key items to watch in the print are the headline and core monthly changes and any further signs of moderation or persistence in year-over-year inflation.
December Pce readings and recent trend
A government release on December showed the PCE index rose 0. 4% on a monthly basis and was up 2. 9% from a year earlier. Core PCE, which excludes food and energy, rose 0. 4% month over month and was up 3. 0% year over year. Headline PCE has trended upward to 2. 9% after readings of 2. 8% in November and 2. 7% in October. Core readings had generally been in the 2. 8%–2. 9% range dating back to May before reaching 3. 0% in December.
Why the Federal Reserve cares
The Federal Reserve uses the PCE price index as its preferred inflation gauge and targets a 2% annual inflation rate based on that measure. If the upcoming PCE print confirms moderation from the recent highs, it would reinforce signals from the consumer price index that inflation may be moving closer to the Fed’s target. Policymakers have cited core data as an important indicator of underlying price pressures, so both headline and core dynamics will factor into their assessment.
Market implications and near-term outlook
Current market pricing has been reflecting potential rate cuts later in the year; futures had been pricing in two quarter-percentage-point cuts for 2026 and had been drifting toward a view that a third cut is possible. Comments from Fed officials have suggested additional cuts may be feasible if inflation continues to ease. If the pce release shows moderation consistent with prior consumer price numbers, that would increase the likelihood markets place on more easing. Conversely, hotter-than-expected prints would likely bolster the view that policy must remain restrictive for longer. Given the timing just before the open, expect immediate market volatility and rapid reassessments of policy probabilities based on the details of the print.
Key takeaway: The PCE publication Friday at 8: 30 a. m. ET is positioned to be a market mover because it is the Fed’s preferred inflation gauge and recent December readings were elevated; how the new release compares to those readings will shape near-term expectations for interest-rate cuts and market direction.
