Core inflation still sticky
Core inflation is sitting near 3% — about 50% above the Fed’s 2% target — prompting calls that rate cuts are unlikely until inflation meaningfully falls, with the Fed funds rate currently 3.50–3.75% commentary. Analysts say an oil shock could push CPI toward 3.5–3.7%, further delaying cuts and keeping real yields elevated analysis.
Core PCE climbed to 3.1% year‑over‑year in January, the BEA’s Personal Income and Outlays release showed on March 13, 2026 bea.gov; that was the highest annual core PCE reading since March 2024, according to advisor reports. advisorperspectives.com The BLS reported headline CPI at 2.4% year‑over‑year and core CPI (ex‑food and energy) at 2.5% in February, with the shelter index rising 0.2% and cited by the agency as the largest monthly contributor to the increase. bls.gov Goldman Sachs’ commodity research modelled that a sustained 10% rise in oil prices would add roughly 0.28 percentage points to U.S. headline CPI (which could lift year‑ahead readings toward ~3% if oil stays elevated), and Barclays warned oil near $100 per barrel would push headline inflation higher if persistent. investinglive.com Market pricing has shifted: futures and traders pushed expected Fed cuts later after the recent data and energy shocks, with news outlets reporting investors now see fewer or delayed cuts this year; at the same time, 10‑year real Treasury yields rose to about 1.85% on March 11, 2026, keeping real borrowing costs elevated. cnbc.com
