Most of the Personal Consumption Expenditures (PCE) inflation gauges are sourced from Consumer Price Index (CPI) data, but Producer Price Index (PPI) input data is of increasing relevance, import price index (IPI) data can prove occasionally relevant. There are also some high-leverage components that only come out on the days of the GDP and PCE releases.
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Summary: PCE Nowcasts
The relevant import price index for international airfare PCE came in substantially softer, shaving off a basis point from our m/m and y/y Supercore PCE estimates. Core PCE y/y also rounds down to 2.5% now, which also happens to be the Fed's Core PCE projection for Q4 this year. We maintain June as our base case for the next cut, but with risks currently skewed to a May interest rate cut.
