Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
Why the FOMC Is Watching Real Wages More Than Headline CPI
This episode digs into a quiet shift inside the Federal Reserve's decision-making: why the FOMC is paying less attention to headline CPI and more to real wage growth. Lucas walks through the mechanics — how nominal wage gains of 3.9 percent year-over-year stack up against core PCE running at 2.71 percent, and why a 4.2 percent unemployment rate with falling participation creates a genuine policy headache. Luna pushes back on whether the Fed's own rate hikes are the biggest drag on real wages. They look at the July 2026 data: average hourly earnings at $37.60, the breakeven rate…
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