Why Core PCE Is the Fed's Real North Star

With CPI hitting 4.2% in May — the highest in three years — headlines are screaming inflation. But Lucas and Luna argue the real story is quieter: Core PCE, the Fed's preferred gauge, is running at just 2.8% annualized over the past three months. They unpack why the gap between CPI and PCE matters, how services inflation is stickier than goods deflation, and what the 10-year breakeven rate of 2.34% signals about market expectations. Plus, the bond market's reaction — 10-year Treasury yield at 4.54% — suggests traders are pricing in a higher neutral rate, not panic. A focused look at which inflation measure actually drives policy decisions. #CorePCE #CPI #Inflation #FederalReserve #BondMarket #TreasuryYields #10YearBreakeven #MonetaryPolicy #EconomicData #ServicesInflation #MayCPI2026 #MacroTuesdays #Fexingo #FexingoBusiness #BusinessPodcast #Economics #FedPolicy #InflationExpectations Keep every episode free: buymeacoffee.com/fexingo