Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
The Sticky Trap of Services Inflation
With the S&P 500 down nearly one percent this week and the ten-year Treasury yield holding steady at five percent, the market is bracing for a Federal Reserve rate hike. But the real story isn't the headline inflation number—it is the stubborn persistence of services pricing. Lucas and Luna dissect why goods deflation is being masked by sticky shelter costs and how the labor force participation rate tells a different tale than payroll growth. We explore the specific mechanics of core PCE data from July, where prices still climbed despite slowing real GDP growth of just one point five…
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