Core Inflation

Macro & the Fed

Core inflation is inflation measured after removing food and energy, whose prices swing sharply and often temporarily.

Both CPI and PCE are published in a core version. A jump in oil prices can move headline inflation a lot in a single month, while the core measure better shows how broadly price increases have spread through the economy. That is why markets trying to anticipate the Fed usually pay more attention to the core figure than to the headline.

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