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What the Federal Reserve's favorite inflation measure can tell us
The personal consumption expenditures price index, better known as the PCE, tracks what we paid for goods and services in the previous month.
What if we told you inflation was back to its target rate?
When we focus on recent months rather than year-on-year increases, inflation numbers look pretty good, says economist Alan Blinder.
How long does it take for Fed rate hikes to work?
Though the Federal Reserve's actions are being felt throughout the economy, stabilizing prices could take 12 to 18 months.
What do different measures of inflation tell us?
The PCE and CPI measure different things, but the message they send to consumers may influence expectations — that then can affect inflation.
When it comes to inflation measures, the Federal Reserve prefers the PCE
For monetary officials, the personal consumption expenditures gauge beats the CPI. A trip to the grocery store helps explain why.
Can the Fed lower inflation without getting the economy into a recession?
"A look at the record shows that the Fed often stumbles in its efforts to save the day," says Ben White, chief economic correspondent at Politico.
Consumer prices are growing faster than they have in 30 years
The Fed's preferred means of measuring inflation jumped 0.6% in October.
What is the PCE price index?
The personal consumer expenditures price index is one of the Fed's favorite tools for tracking inflation.
Why some inflation measurements don’t include food and energy prices
Core inflation strips out food and energy prices, because they can be pretty volatile.
Here's how the Federal Reserve determines the inflation rate
The Consumer Price Index tracks the average price change over time for a “basket” of goods and services. The CPI takes into account things like food, transportation and health care. If the CPI goes up, that’s considered an indication that the inflation rate is rising. But when the Federal Reserve calculates the inflation rate, it […]