Economists Divided on 2026 Inflation Outlook as Structural Pressures Linger
Forecasts for Core PCE inflation in 2026 reveal stark divergences among economists, with projections ranging from 2.2% to 2.8%—still above the Fed's target. The September reading held at 2.8%, a far cry from the sub-2% pre-pandemic norm.
Tariff impacts and labor market constraints loom as persistent inflationary drivers. Housing costs, previously a major contributor, show signs of moderation—offering one glimmer of potential relief.
Market participants await clarity on how immigration policies may Ripple through wage structures. The delayed return to target inflation suggests prolonged monetary policy tightness, with implications for risk assets.