The Fed Prefers PCE Over CPI

The Fed prefers PCE over CPI because it's a little bit less volatile. The next time we get the personal income and spending data, that's when the PCE numbers will come out again. I don't like core measures of inflation because food and energy prices dramatically affect your actual consumer. Maybe the Fed can use that as justification to stop or to not cut rates. But if you're trying to measure the actual impact on consumers, I think it's pretty clear from both measures that we have seen improvement recently.