Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
Why Sticky Services Inflation Is Keeping Rates High
With the August unemployment rate holding steady at four point one percent and core PCE inflation ticking up to one point three percent, the Federal Reserve faces a stubborn puzzle. Lucas and Luna break down why services inflation, particularly in housing and insurance, refuses to cool like goods prices did in previous cycles. They examine the lag between wage growth and service sector pricing, asking whether the Fed’s current pause is a strategic hold or a delayed reaction to persistent cost pressures that aren't showing up in headline CPI.
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