Sticky core PCE.
Core PCE inflation that refuses to come down. The Fed's preferred inflation measure with food and energy stripped.
Shows up in Fed minutes and FOMC press conferences.
Why it matters: When core PCE stays high, rate cuts get pushed back, repricing every duration-sensitive asset.
Technical and plain English.
Sticky Core PCE. The Personal Consumption Expenditures price index, excluding food and energy components (core), further filtered to include only categories whose prices change infrequently (sticky). Compiled by the Atlanta Fed from BEA PCE data. Used by FOMC members as a leading signal of persistent inflation pressure as opposed to transitory shocks. Sticky categories include rent, services, insurance, and medical care. Flexible categories (gasoline, food, used cars) are excluded.
The Fed cares about inflation that's stuck in the system, not inflation that's a one-off shock. So they look at PCE (a broad inflation measure), strip out food and gas (which bounce around), and then strip out anything else that changes prices fast. What's left. Rent, insurance, doctor's visits. If those are still going up, inflation is real and structural. The Fed keeps rates high.
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