FX.co ★ US Core PCE Prices Rise More than Expected

The US core PCE price index, the Federal Reserve’s preferred measure of underlying inflation, increased by 0.4% month-over-month in December 2025. This rise exceeded market expectations for a more moderate 0.3% gain and marked the sharpest monthly increase since February, consistent with the FOMC’s warning that the disinflation process is proceeding more slowly than previously anticipated. On an annual basis, the core PCE price index was up 3% from a year earlier.