Stagflation fears just hit Wall Street. Now for the next crucial report on prices [Video]

The Federal Reserve’s favorite inflation reading is due Friday morning. For Wall Street, the stakes are high.

The Personal Consumption Expenditures price index is expected to rise 2.6% for the 12 months ended in March, according to FactSet estimates. The core PCE index, which excludes the more volatile energy and food categories, is expected to rise 2.7% from the prior year.

Investors are nervously awaiting the report after first-quarter US GDP came in softer than expected Thursday. Gross domestic product, which measures all the services and goods produced in the economy, rose at an annualized rate of 1.6% during the first three months of the year, the Commerce Department reported.

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That’s the weakest pace of growth since the second quarter of 2022, when the economy contracted, and well below the Atlanta Fed’s estimate of a 2.7% gain.

A slowing economy should help slow inflation and offer support for the Fed to start easing …