Episode
Why the Fed Is Watching the PCE Over CPI Now
- Published
- Jul 13, 2026
- Duration seconds
- 433
- Processing state
not_requested
Actions
POST https://stenobird.com/v1/public/podcasts/the-federal-reserve-podcast-with-fexingo-interest-rates-fomc-meetings-and-monetary-policy-7871696/episodes/why-the-fed-is-watching-the-pce-over-cpi-now/transcription-requests
Idempotently request low-priority transcript generation for this episode.GET https://stenobird.com/podcast/the-federal-reserve-podcast-with-fexingo-interest-rates-fomc-meetings-and-monetary-policy-7871696/why-the-fed-is-watching-the-pce-over-cpi-now.md
Read the agent-friendly Markdown representation of this episode resource.
Summary
Episode 112 of The Federal Reserve Podcast with Fexingo digs into a subtle but critical shift in how the Fed reads inflation. While headline CPI still grabs headlines, Lucas and Luna explain why the central bank's preferred gauge — the personal consumption expenditures price index, or PCE — is telling a different story. With core CPI at 336.1 and core PCE at 130.1, the gap between them has widened. This episode explores why PCE matters more for rate decisions, how it accounts for substitution effects, and what the latest data suggests about the path forward. Lucas breaks down the compositional differences — PCE weights health care and housing differently, catches discount shopping, and smooths out volatility. Luna questions whether the Fed's reliance on PCE is becoming outdated as 'funflation' reshapes consumer spending. Along the way, they reference the inverted yield curve, Fed funds rate held at 3.62 percent, and the falling labor force participation rate. A focused, data-driven conversation for anyone tracking the next FOMC move. #PCE #CorePCE #CPI #CoreCPI #FederalReserve #FOMC #MonetaryPolicy #Inflation #InterestRates #Funflation #LaborForceParticipation #YieldCurve #FedFundsRate #CentralBank #Economics #FexingoBusiness #BusinessPodcast #FedPodcast Keep every episode free: buymeacoffee.com/fexingo