Xcel Energy Inc. (XEL) Stock Forecasts

Summary

The Fed's favorite inflation indicator, the PCE Price Index, will be released by the BEA this morning. The index differs from the better-known Consumer Price Index (CPI) because its composition is changed frequently and it is quicker to reflect real-time pricing. Through June, PCE inflation was reported at 2.5% year over year; by comparison, the latest CPI report, through July, had inflation at 2.9%. Core PCE, which removes volatile food and energy prices, was at 2.6% in the latest month. Our PCE forecasts call for 2.6% for both the headline and the core reading -- essentially steady month to month as progress toward the Fed's 2% goal gets harder as the target gets closer. Inflation in this cycle peaked in summer 2022 and has been on a fairly consistent downward trek. We track 20 inflation measures on a monthly basis. On average, they are indicating that prices are rising at a 2.8% rate year over year, down 12 basis points versus a month ago. The numbers are volatile and distorted somewhat by ultra-low readings within the Producer Price Intermediate Goods category, which may well be pointing to easing prices across the inflation spectrum in the months ahead. Focusing on core inflation -- which we obtain by averaging Core CPI, market-based PCE Ex-Food & Energy (from t