Oxford Economics forecasts July PCE inflation

Oxford Economics has projected that the U.S. headline Personal Consumption Expenditures (PCE) inflation will register at 3.6% year-over-year in July, slightly easing from 3.7% in June. This forecast aligns with the Federal Reserve’s preferred gauge for inflation, which remains above the central bank’s 2% target. The official data release for July PCE is scheduled for August 26, 2026. Oxford Economics suggests that with cooling services inflation and a stable labor market, the Federal Reserve might maintain its current interest rates through 2026.

Market activity in gold prices appears to reflect this inflation outlook. Prediction markets have shown a decrease in the probability of gold reaching higher price targets in August, suggesting that participants might be adjusting expectations due to the persistent inflationary pressures indicated by the PCE forecast. The projected inflation rate could influence the Federal Reserve’s decisions on interest rates, impacting various financial markets, including those for gold.

Key Takeaways

• Oxford Economics projects a 3.6% year-over-year increase in July’s PCE inflation, down from 3.7% in June.
• Markets appear to interpret the persistent inflation forecast as a factor that could maintain current interest rates, possibly affecting gold price forecasts.
• Gold price prediction markets show a decrease in confidence that gold will hit higher prices in August, consistent with concerns about ongoing inflationary pressures.

What to Watch

The upcoming release of the official July PCE data on August 26 will be closely monitored for confirmation of these forecasts. Any significant deviation from the expected 3.6% inflation rate could shift market expectations regarding Federal Reserve policies and their influence on gold prices. Additionally, statements from Federal Reserve officials on interest rate strategies will be key indicators for market participants assessing potential shifts in economic policy and its impact on commodity markets.

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Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.