Fed's preferred inflation gauge falls below 3% for first time since March 2021

January 26, 2024

The Fed's preferred inflation gauge has moved below 3% for the first time since March 2021, before the start of the central bank's rate-hiking campaign. Core PCE is the inflation measure mentioned most often by Fed Chair Jerome Powell. Month over month, core PCE rose 0.2% in December, up from 0.1% in November. Importantly, annualized core PCE over the last three and six months is now below the Fed's 2% target. December's CPI report showed core inflation was 3.9%.