Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
How the Fed Reads the PCE Deflator
In this episode of The Macro Memo, Lucas and Luna dig into the Federal Reserve's preferred inflation gauge: the PCE price index. With July core PCE coming in at 3.3 percent year-over-year, they explain why the Fed watches PCE instead of the CPI, how it's built from business data rather than consumer surveys, and what the latest numbers mean for the path of interest rates. They break down the difference between headline and core, the role of the 10-year breakeven rate at 2.33 percent, and why Fed officials like Hammack are signaling urgency. If you've ever wondered why the…
The skinny
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