El Niño Could Lift U.S. PCE Prices by Up to 1 Percentage Point If La Niña Follows

A Federal Reserve Bank of San Francisco analysis says El Niño poses a risk of lifting U.S. personal consumption expenditures (PCE) prices by up to 1 percentage point in 2027 if La Niña follows.

The estimate describes a modeled risk, not a forecast. Without La Niña following El Niño, the analysis finds no additional net price effect in 2027. Food and core services account for most of the modeled pressure.

The analysis draws on 22 historical El Niño episodes, only four of which were very strong. The current El Niño could be stronger than any event in that sample, making the historical comparisons uncertain. Modern supply chains and global markets may also affect how well past patterns apply.

The analysis also identifies a potential increase in employment beginning in 2027. TokenPost previously covered a European heatwave estimate of higher food-price inflation in 2027; that estimate focused on European food prices, while the San Francisco Fed analysis examines U.S. PCE prices.