US PCE Inflation to Come in ‘Hot’ Today: JPMorgan, UBS, Other Wall Street Giants

US Personal Consumption Expenditures (PCE) inflation, the Fed’s preferred inflation gauge, is expected to come in hot at 3.8% today. Stock and crypto market participants are closely awaiting PCE data for further cues on Fed interest rate decisions.

With the US dollar index and 10-year Treasury yield (US10Y) rising again, the upcoming release is critical as all assets including stocks, gold, Bitcoin, Ethand XRP are getting hammered amid rising market uncertainty.

Wall Street giants, such as JPMorgan, Bank of America (BofA), Goldman Sachs, Morgan Stanley, and UBS, have estimated headline US PCE inflation at 3.8%. This could trigger further selloffs in risk assets.

Wall Street Giants JPMorgan, BofA, UBS See Hot US PCE Inflation

The U.S. Bureau of Economic Analysis will release the April US PCE inflation report on May 28. Bitcoin, gold, and stock markets are trading in the red today ahead of key inflation data, as the US-Iran war escalated following fresh strikes.

JPMorgan highlighted risks of upside surprises in PCE inflation, with broader 2026 forecasts pointing to US core PCE accelerating above 3.3% YoY amid elevated oil prices and goods price pressures. The Wall Street giant expected a month-over-month (MoM) inflation rise of 0.25%, down from 0.3% Core PCE inflation previously.

Notably, Bank of America (BofA), Morgan Stanley, Goldman Sachs, and UBS predict headline PCE inflation increased between 0.43%-0.45% MoM and 3.8% YoY.

The banks estimate core PCE inflation to come in 0.27%-0.30% MoM range. Meanwhile, Core PCE is estimated at 3.3% YoY. Notably, JPMorgan, Citi, and TD Securities have lower Core PCE forecasts.

The WSJ’s Nick Timiraos revealed forecasters anticipate the core PCE rose 0.28% in April, based on the CPI and PPI inflation data. This would lift the 12-month rate to 3.3%, the highest since November 2023. Also, the 6-month annualized rate would rise to 3.8%, a 3-year high.

Economists See Rising Inflation and Fed Rate Pause

Economists’ forecasts also point to a rise in inflation in April, with core PCE inflation data expected to rise 0.3% month-over-month (MoM), the same as earlier. However, the year-over-year (YoY) print is projected at 3.3%, above 3.2% in March.

Meanwhile, headline PCE is projected at 0.5% MoM, lower than 0.7% rise last month. The headline PCE inflation is still estimated to come in hot at 3.8%, increasing from 3.5% earlier.

Fed Neel Kashkari said the top priority is reducing inflation. He added that consumer prices are still too high even as the US labor market remains strong. Meanwhile, markets are bracing for incoming Fed Chair Kevin Warsh to hike rates as his first policy move.

The CME FedWatch Tool shows more than 40% odds of a 25 bps Fed rate hike by the central bank in December. This could put Bitcoin and other risk assets under further selling pressure.

Bitcoin price bounced above $73K amid some buying following the crypto market crash today. The 24-hour low and high are $72,659 and $76,014, respectively. Trading volume remains low ahead of the monthly crypto options expiry and the US PCE inflation release.