The Fed could be stuck with conflicting signals from CPI and PCE - ForexLive

PCE core y/y

The Fed's mandate is to keep inflation near 2% but which inflation measure? The Fed looks at both CPI and PCE but its preferred measure is PCE.

Today's core CPI number rose 0.39% month over month but that won't be repeated with the PCE report, according to a note from Morgan Stanley. In a note to clients after CPI, they say that adjustments in core PCE will mean it rose 0.29% m/m.

The shelter weight is 36% in the PCE report versus 15% in CPI.

While that would push the six-month core CPI number to 2.2% from 1.9% (annualized), it's not far off of the Fed's target. It also may be a reason that Fed officials don't overreact to today's CPI data.

Adblock test (Why?)

https://news.google.com/rss/articles/CBMiaWh0dHBzOi8vd3d3LmZvcmV4bGl2ZS5jb20vbmV3cy90aGUtZmVkLWNvdWxkLWJlLXN0dWNrLXdpdGgtY29uZmxpY3Rpbmctc2lnbmFscy1mcm9tLWNwaS1hbmQtcGNlLTIwMjQwMjEzL9IBbWh0dHBzOi8vd3d3LmZvcmV4bGl2ZS5jb20vbmV3cy90aGUtZmVkLWNvdWxkLWJlLXN0dWNrLXdpdGgtY29uZmxpY3Rpbmctc2lnbmFscy1mcm9tLWNwaS1hbmQtcGNlLTIwMjQwMjEzL2FtcC8?oc=5

2024-02-13 16:24:00Z
CBMiaWh0dHBzOi8vd3d3LmZvcmV4bGl2ZS5jb20vbmV3cy90aGUtZmVkLWNvdWxkLWJlLXN0dWNrLXdpdGgtY29uZmxpY3Rpbmctc2lnbmFscy1mcm9tLWNwaS1hbmQtcGNlLTIwMjQwMjEzL9IBbWh0dHBzOi8vd3d3LmZvcmV4bGl2ZS5jb20vbmV3cy90aGUtZmVkLWNvdWxkLWJlLXN0dWNrLXdpdGgtY29uZmxpY3Rpbmctc2lnbmFscy1mcm9tLWNwaS1hbmQtcGNlLTIwMjQwMjEzL2FtcC8