US Unconventional CPI - 2025-05-12

CPI is heading lower across the broad range of unconventional indicators. Our favorite is Market-Based PCE. We like it because the Fed prefers it to CPI, and uses it to judge when it has hit its 2% target. But this version eliminates government expenditures such as Medicare services that people don't really pay. Headline at 1.83% YOY is below the Fed's target. Core at 2.16% YOY is barely above. Mission accomplished, Jay. Go home now.