Got an economics question for you all. Sounds like Powell is satisfied with inflation moving sustainably to 2%, and was apparently (at least on the surface) so thrilled by that progress that he cut rates 0.5%.
However, looking at core CPI, it appears to still be stuck above 3%. https://www.usinflationcalculator.com/inflation/united-states-core-inflation-rates/
Granted, headline CPI is more like 2.5%, but that factors in energy, which is notoriously volatile. All we need is some nasty war, and oil can spike like it did in 2022. For that reason, I had understood that core CPI is usually considered more reliable.
Finally, I understand that the Fed prefers core PCE, and the difference there with core CPI is unclear. Anyway, core PCE has been stuck at 2.6% for months too.
https://www.investing.com/economic-calendar/core-pce-price-index-905/
That is, no further progress seems to be made, and Core PCE still seems considerably higher than the pre-2021 numbers, which were more in the 1.5% to 2.0% range even before the COVID disruptions.
What are your thoughts on this inflation situation? (I am not referring to whether you think the stock market will go up or down, but more whether you agree with Powell that inflation is tamed, or if I am missing something key about the trajectory of inflation.)
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