Why the Fed Trusts PCE Over CPI

The Fed's favorite inflation gauge, the PCE price index, is rising while CPI falls. In this episode, Lucas and Luna break down the structural differences between the two measures, why the Fed prioritizes PCE, and what the current divergence means for the rate path in July 2026. With core CPI at 336.1 (down) and core PCE at 130.1 (up), the signals are mixed. The hosts explain how the Fed reads these conflicting data points and how changes in consumer behavior, especially around housing and healthcare, drive the gap. A must-listen for anyone trying to understand the real inflation picture. #FederalReserve #PCE #CPI #Inflation #MonetaryPolicy #Economics #FedRatePath #CoreInflation #Housing #Healthcare #ConsumerSpending #InterestRates #FOMC #MacroEconomics #CentralBanking #FexingoBusiness #BusinessPodcast #EconomicData Keep every episode free: buymeacoffee.com/fexingo