Let’s discuss the Fed’s preferred measure of inflation vs Trump’s claims.
PCE Year-Over-Year Inflation Details
- PCE: 3.6 percent, bottomed at 2.3 percent in March 2025
- PCE Goods: 3.9 percent, bottomed at -1.2 percent in September 2024
- PCE Services: 3.5 percent, bottomed at 3.3 percent in April 2026
- PCE Core: 3.1 percent, bottomed at 2.6 percent in March 2025
PCE Month-Over-Month
PCE Month-Over-Month Details
- PCE: 0.49 percent
- PCE Goods: 0.80 percent
- PCE Services: 0.35 percent
- PCE Core: 0.32 percent
The Fed’s preferred measure of inflation is the PCE. And the Fed is very concerned about services.
PCE and CPI Inflation Details
CPI and PCE Inflation Year-Over-Year
- CPI: 3.4 percent
- CPI Core: 2.5 percent
- PCE: 3.7 percent
- PCE Core: 3.4 percent
Four Measures of Inflation
PCE Above Fed’s Target
If you are a Trump or Fed apologist you are watching core CPI at a still high 2.56 percent and making excuses.
However, the PCE is the Fed’s preferred measure of inflation.
Year-over-Year PCE inflation has been over the Fed’s 2.0 percent target for 68 straight months since February 2021.
Yet, the Fed is still waiting for more data.
The Fed Will Get the Blame
No matter what happens now, the Fed is going to get the blame.
If the Fed hikes (as it should have long ago), and the stock market or economy tanks, the Fed will get the blame.
But an obvious AI bubble is brewing, and the Fed ignored that. It ignored the huge surge in credit fueling AI. And the Fed ignores off-balance sheet accounting that hides this debt and inflates earnings.
If the Fed does nothing, the bubble will keep brewing but will eventually pop. The Fed will get the blame for that too.
Meanwhile, the Fed, Fed apologists, and Trump apologists keep pretending everything is under control.
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The Fed wants more data. Today it got more data. The PCE data was miserable. And a deeper dive into that topline 3.4 percent GDP suggests some real issues.
I continue to search for a statement or comment that taco has made where he told the truth. It is worse than looking for a needle in a haystack. Apparently, this has never happened before.
The future is a great land where fanciful invention is cheap to create and publish. Legally, in deals, a statement of future levels or values is generally taken for granted (by a sophisticated listener) to be an opinion (thus not accountable). Trump knows his fans cannot tell a statement of opinion from one of fact (which can be proven true or false, this held accountable) at this level. So he states everything as if “fact,” when it is all opinion: conjecture. The only legal remedy to hold him accountable is impeachment, unlikely and a bad fit for this sort of thing. His escape is built in. His faith-based fans outsource their reasoning (such as it is) and belief to him. He knows this and has no scruples about exploiting it.
A lyric from Helter Skelter.
The key question is when will the bubble burst? Bubbles always seem to hold together much longer than expected! Any thoughts on timing? We saw Alphabet/Google get hit hard and lose $500 Billion in value today. What happens tomorrow?!
Amazon reporting equally bad numbers this evening.
The tide is going out fast now.
With all the puts MPO45v2 has been buying he should be able to personally pay off the US debt 🙂
Google stock has its worst day ever after earnings miss raises AI fears
https://qz.com/google-stock-worst-day-ever-earnings-miss-ai-102926
Bubble burst sentiment is suddenly being heard everywhere, as here. There may be some bargains out there. Among the falling knives.
Jeffrey Gundlach paints a pretty good comprehensive crash scenario, noting resemblances to 2007::
https://www.youtube.com/watch?v=iW5cijeoWyk