Why the Fed Watches Core PCE While CPI Cools

In this episode of The Macro Memo, Lucas and Luna dig into a quiet but crucial divergence in the inflation data: headline CPI and the PCE price index are cooling, but core PCE — the Fed's preferred gauge — actually ticked up in June. With the Fed on hold and the ten-year breakeven rate drifting down to 2.27 percent, the hosts ask what the central bank is really looking at. Lucas walks through the mechanics of why core PCE can rise while CPI falls, from rental weights to the way healthcare prices are measured. They also bring in the latest JOLTS numbers — job openings down to 7.36 million — to frame the Fed's dilemma: a cooling labor market, but sticky core inflation. And they touch on what a divided Fed means for investors as the committee debates its next move. If you've ever wondered why the Fed seems to ignore the CPI you see in the headlines, this episode explains the gap — and what it means for your money. #CorePCE #InflationData #FederalReserve #CPI #PCEPriceIndex #FedOnHold #JOLTS #LaborMarket #EconomicIndicators #MonetaryPolicy #BreakevenRate #DividedFed #Investing #Economics #MacroMemo #FexingoBusiness #BusinessPodcast #Economy Keep every episode free: buymeacoffee.com/fexingo