Bumpy Ride for Inflation Battle but No Big Worries with Latest Report

The latest report on inflation is showing the biggest increase in four months. It’s the PCE report which is the Fed’s preferred inflation gauge, and one that provides important data for a decision on rate cuts. The results were also in-line with expectations and what the Fed expects to be a bumpy ride back to its 2% target.   PCE stands for the Personal Consumption Expenditure index. The Fed prefers this report over the Consumer Price Index because it more accurately reflects what substitutions consumers are making as prices rise and fall. But the Consumer Price Index or CPI also produces important data for the Fed’s consideration along with the Producer Price Index or PPI for wholesale prices. And those two reports recently surprised us on the upside.   The new PCE report shows similar upside results with a .3% increase in January and an annual rate of 2.4%. The Fed pays the most attention to the “core” rate, which eliminates food and energy. That reading was .4% higher in January with an annual rate of 2.8%. Keep in mind that the Fed wants to see continued progress in lowering inflation to the central bank’s 2% target...   ...Check for links to those stories in the show notes at newsforinvestors.com. Sign up for a free RealWealth membership while you are there for access to our market data. You might also want to check out our recent webinar on real estate lending with Richard Advani. He’ll let you know your best options when it comes to real estate loans, and conserving as much of your own cash as possible. You'll find the webinar under the Learn tab. And please remember to subscribe to this podcast, if you haven’t already.   Thanks for listening! Kathy Fettke   Links:   1 - https://www.cnbc.com/2024/02/29/pce-inflation-january-2023-.html   2 - https://www.marketwatch.com/livecoverage/pce-inflation-for-january-s-p-500-futures-slip-ahead-of-key-report/card/pce-shows-biggest-rise-in-u-s-inflation-in-four-months-7iq9v0hdKgUenOhzZ4pG?mod=home-page