Inflation: Not Defeated Yet

Inflation: Not Defeated Yet

Core PCE Still Above 2%
Has inflation been beaten as many have declared? A key metric says otherwise.

Be smart: The inflation index the Federal Reserve looks most closely at is Core Personal Consumption Expenditure (Core PCE), which excludes volatile elements like food and energy.

  • Core PCE has remained high for years. As of July, it is still over 4%, which is double the Fed’s target of 2%.

Bottom line: Core PCE’s stubbornness is a sign we aren’t out of the woods. The Fed may raise interest rates if it doesn’t start declining more rapidly.