Macro5:13 PM ET

Demand now the largest driver of US PCE inflation

By BORSA NewsroomPublished Oct 28, 2026, 5:13 PM EDTUpdated Oct 28, 2026, 5:14 PM EDT

Demand-driven components contributed +1.2 percentage points to the +3.4% year-over-year PCE inflation in August, the largest since September 2023. Supply factors added +1.0 point. In 2022, supply was the main driver. The shift matters for Fed policy: rate hikes can slow demand but have limited effect on supply pressures.

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WHAT WE KNOW

Demand-driven components contributed +1.2 percentage points to the +3.4% YoY PCE inflation in August.