If markets hope to recover from the sharp sell-off triggered by the Federal Reserve's December meeting, Friday's release of the Personal Consumption Expenditure price index — widely regarded as the Fed's preferred inflation measure — will play a crucial role.

Unfortunately for investors, the outlook is far from reassuring.

Scheduled for release at 8:30 a.m. ET Friday, economists expect the PCE price index to climb to 2.5% year-over-year in November 2024, up from 2.3% in October. This would mark the second consecutive monthly acceleration in the headline figure.

On a monthly basis, the index is projected to increase by...