Survey projects 6% inflation for second quarter of 2026
The Story
A survey from the Federal Reserve Bank of Philadelphia projects consumer price inflation will hit 6% in the second quarter of 2026, up sharply from a 2.7% forecast three months ago. The Survey of Professional Forecasters also raised its full-year estimates for both headline and core inflation, while lowering its growth outlook.
Key Facts
- Consumer price inflation is projected to hit 6% for the second quarter, according to the Survey of Professional Forecasters.
- Three months ago, the panel put the expected CPI gain at 2.7%.
- The upward revision followed U.S. and Israeli attacks against Iran, which sent energy prices soaring.
- For the full year, the panel put CPI at 3.5% for all items and 2.9% for core (excluding food and energy).
- In the prior survey, full-year estimates were 2.6% for both.
- Third-quarter headline CPI is projected at 3%, core at 2.9%.
- Fourth-quarter CPI is projected at 2.5% headline and 2.7% core.
- The 10-year projected annual average CPI is 2.4%, equivalent to 2.22% by the Fed’s preferred PCE measure.
- Headline PCE inflation for Q2 is projected at 4.5%, core at 3.4% (prior estimates were 2.7%).
- April headline CPI was 3.8%, the highest in nearly three years; PPI annual rate hit 6%, the highest since December 2022.
- Kevin Warsh is set to assume the role of Fed chair; he would like lower rates but high inflation makes that difficult.
- Policymakers are keeping rates steady with an open mind toward rate hikes if inflation worsens.
- GDP growth forecast: Q2 annualized rate of 2.1%, full year 2.2% (down 0.3 percentage point from prior estimate).
- GDP growth for 2027 is projected at 1.9%, before bouncing back above 2%.
- Unemployment rate for 2026 is expected around 4.5%, 0.2 percentage point higher than the current level.
Conflicting Reports
No conflicting reports identified in the source article.
Still Unclear
No open questions identified in the source article.
Misconceptions
No widespread misconceptions addressed in the source article.
Key Figures
- Kevin Warsh – set to assume the role of Federal Reserve chair.
