MarketWatch EN

Fed’s favorite price gauge shows sticky inflation — and little chance of improvement soon

Core PCE price index has risen 3.1% in past year. Iran conflict will push it even higher.

Mar 13, 2026 &03331313202631; 12:33 UTC feeds.marketwatch.com Trending 3/5

Read original on feeds.marketwatch.com ↗

↘

Negative for markets

Sentiment score: -65/100

High impact Medium-term (weeks)

WHAT THIS MEANS

The Fed's preferred inflation measure, core PCE, remains elevated at 3.1% year-over-year with limited near-term improvement prospects. Geopolitical tensions with Iran threaten to push inflation higher through energy price increases, complicating the Fed's monetary policy outlook.

AI CONFIDENCE

85% Very high

SENTIMENT GAUGE

NEWS POWER SCORE

AFFECTED ASSETS

↑

10-Year Treasury Yield

^TNXBond

Expected to rise

Higher inflation expectations support higher Treasury yields as investors demand inflation premium

↓

Euro / US Dollar

EURUSDCurrency

Expected to decline

Sticky US inflation may delay Fed rate cuts, strengthening USD relative to EUR

↑

Oil (WTI Crude)

CL=FCommodity

Expected to rise

Iran conflict escalation directly impacts crude oil prices upward

↓

S&P 500

^GSPCIndex

Expected to decline

Persistent inflation and geopolitical risk create headwinds for equity valuations

↑

Gold Futures

GC=FCommodity

Expected to rise

Safe-haven demand amid inflation concerns and geopolitical tensions supports gold

PRICE HISTORY

Loading chart...

⚡ SUGGESTED ACTION

Reduce equity exposure and rotate toward defensive sectors and commodities. Consider long positions in crude oil and gold as inflation hedges, while avoiding rate-sensitive growth stocks. Monitor Fed communications for any policy shift signals.

KEY SIGNALS

Core PCE sticky above 3% targetIran geopolitical risk escalationFed rate cut expectations diminishedEnergy price inflation pressureReal yields likely to remain elevated

SECTORS INVOLVED

EnergyUtilitiesConsumer StaplesFinancials

Analysis generated on Mar 16, 2026 at 14:33 UTC

Disclaimer: This analysis is generated by artificial intelligence for informational purposes only and does not constitute financial advice, investment recommendation, or solicitation. Original reporting by MarketWatch. Always conduct your own research and consult a qualified financial advisor before making investment decisions.

Fed’s favorite price gauge shows sticky inflation — and little chance of improvement soon

RELATED INTELLIGENCE