Key takeaways
- The headline PCE price index rises 3.4% year-over-year in August 2026, well above the Federal Reserve's 2% target.
- Core PCE, which excludes food and energy, rises 3.0% year-over-year in August 2026 and also misses the target.
- The Mises Institute counts Sixty-six consecutive months above the Fed's 2% target, with the last lower reading in February 2021.
The Fed's preferred inflation gauge, the headline personal consumption expenditures (PCE) price index, rose 3.4% year-over-year in August 2026. Core PCE, which excludes food and energy, rose 3.0%, and the Mises Institute says August 2026 marks Sixty-six consecutive months of inflation above the Fed's 2% target.
Headline 3.4%, core 3.0%
The headline PCE price index, the Fed's preferred inflation gauge, rose 3.4% year-over-year in August 2026. Core PCE, which excludes food and energy, rose 3.0% year-over-year in August 2026.
Both the 3.4% headline PCE and 3.0% core PCE readings for August 2026 are well above the Federal Reserve's 2% target.
Stripping out food and energy did not bring the core PCE reading for August 2026 down to the Federal Reserve's 2% target either, since core PCE rose 3.0% year-over-year.
The Federal Reserve's 2% target applies to the PCE price index, the Fed's preferred inflation gauge, and in August 2026 the headline PCE reading of 3.4% and the core PCE reading of 3.0% both sat well above that 2% target.
Neither the headline nor the core gauge came close to the target in August 2026, with headline PCE up 3.4% and core PCE up 3.0% year-over-year against the Federal Reserve's 2% target.
Sixty-six months above the 2% target
The Mises Institute says August 2026 marks Sixty-six consecutive months of inflation above the Fed's 2% target. The last time the inflation reading was below the Fed's 2% target was February 2021, according to the Mises Institute.
By the Mises Institute's count, every month of inflation since February 2021 has come in above the Fed's 2% target, a run of Sixty-six consecutive months that reached August 2026 with headline PCE at 3.4%.
The Mises Institute dates that run from February 2021, the last time the inflation reading was below the Fed's 2% target, and the August 2026 headline PCE reading of 3.4% extends it to Sixty-six consecutive months.
Why It Matters
Sixty-six consecutive months of inflation above the Fed's 2% target have produced falling real wages and historically low housing affordability, a direct consequence of the central bank buying Treasuries and mortgage-backed securities with newly created money. Central banks cause recurring economic harm while benefiting a few at the expense of many, and with headline PCE still at 3.4% in August 2026, the Fed is never held accountable or shut down for failure the way any other institution would be. Central banks are institutions worthy of being dismantled, and bitcoin, with its fixed and verifiable supply, enforced scarcity, and self-custody sovereignty, is the best exit from this system of fiat fragility.
