Economic Insights: US: Technical disinflation

Research evidence excerpt

Economic Insights: US: Technical disinflation

Global Markets Research

7 July 2026Economic Insights

Economics - North America

Research Analysts

US: Technical disinflation North America Economics

Aichi Amemiya - NSI

Additional disinflationary force from the BEA’s methodological changes aichi.amemiya@nomura.com

+1 212 667 9347

Jeremy Schwartz - NSI

• We expect the BEA’s planned methodological changes to certain PCE price jeremy.schwartz@nomura.com

components to reduce y-o-y core PCE inflation by about 20bp. +1 212 667 9637

• These changes are defensible on a case-by-case basis, but the timing and cumulative

Ruchir Sharma - NSI impact raises concerns of political influence. The threshold and political stakes for ruchir.sharma@nomura.com

changing PCE methodology is lower than for CPI, but on the margin, this update +1 212 667 9186

suggests the Trump administration may continue attempting to influence Fed policy

and inflation narratives.

• In addition, waning impact from tariffs, lower crude oil prices, residual seasonality, and

moderating wage growth support our view that core PCE inflation is likely to be peak

in the coming months.

• Waning inflation momentum is likely to ease some concerns around inflation.

Consequently, we continue to expect the Fed to remain on hold indefinitely.

Fig. 1: Components that are subject to methodological Fig. 2: Portfolio management & investment advice services,

changes boosted y-o-y core PCE inflation by 60bp in total and computer software & accessoriees substantially boosted

Decomposition of y-o-y core PCE inflation core PCE inflation

Contributions to y-o-y core PCE inflation from the components that are

subject to methodological changes

Source: BEA, Haver, Nomura

Upcoming methodological changes to key components of the PCE price index