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Did The Fed Just Back Down? | Joseph Wang & Michael Ippolito

Forward Guidance

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The Fed's Progress in Inflation

The Fed doesn't look at headline inflation. Their favorite measure is something called core PCE. So a decreasing headline inflation gives them more comfort and buys them more time. But what they're really concerned about though is core inflation which as you can see in the chart is also trending in the right direction but at a much, much slower rate than headline.

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