The Economy & the Fed

Core Inflation

Inflation measured without food and energy prices. Those two swing sharply with harvests, weather, wars and oil supply, so they can make one month’s number look alarming or comforting for reasons that do not last. Removing them shows the slower, steadier trend underneath, which is the part a central bank can actually influence with interest rates. That is why markets and the Federal Reserve watch core figures, such as core CPI and core PCE, most closely, even though food and energy are very real costs for households.

Educational information, not investment advice. See it applied across the screener →