After today's PPI data, Oxford Economics' PCE tracking nowcast points to a 0.15% M/M in headline inflation, still small enough that headline inflation should tick down to 3.6% Y/Y (from 3.7% in June)

• Meanwhile, Pantheon Macroeconomics expects core PCE inflation to remain near 3.0% Y/Y, as higher energy prices ripple through to consumer goods prices while services inflation slows.
• Pantheon adds that the absence of spillovers from higher energy prices into services prices, together with a fragile labour market, should ensure that the FOMC keeps policy unchanged for the remainder of the year.

PPI releases have long served as the raw material for private-sector PCE tracking, since several PCE components, notably portfolio management, healthcare and airfares, are sourced directly from PPI rather than CPI. Sell-side and independent macro shops typically publish revised PCE nowcasts within hours of the print, and the pattern in past episodes is that these estimates frame expectations in the days before the official PCE release, often muting the eventual surprise unless the trackers have collectively misread the component detail. The relevant distinction here is between headline and core: a soft headline nowcast alongside a core reading holding near prior levels implies the deceleration is energy and goods driven rather than broad-based, which historically matters more to the policy read than the headline direction alone. The transmission channel runs from the inflation path to the front end through rate expectations, and forecasters in this note are explicitly linking a benign composition and a soft labour market to an extended hold. Worth watching is whether other tracking shops converge on similar estimates, since dispersion among nowcasts has tended to signal a messy component mix and a wider error band around the official print.