Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
Why the Fed Watches Core PCE While CPI Cools
In this episode of The Macro Memo, Lucas and Luna dig into a quiet but crucial divergence in the inflation data: headline CPI and the PCE price index are cooling, but core PCE — the Fed's preferred gauge — actually ticked up in June. With the Fed on hold and the ten-year breakeven rate drifting down to 2.27 percent, the hosts ask what the central bank is really looking at. Lucas walks through the mechanics of why core PCE can rise while CPI falls, from rental weights to the way healthcare prices are measured. They also bring in the latest JOLTS numbers — job openings down to 7.36 million…
The skinny
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