Ever wonder why the Federal Reserve seems to ignore the inflation numbers you hear on the news? It's likely because they're focused on the Personal Consumption Expenditures (PCE) price index, not the CPI. This lesson will reveal why the Fed prefers PCE and how its movements directly influence interest rates, your savings, and the entire economy.
Did you know the Federal Reserve, the most powerful financial institution in the U.S., doesn't primarily use the Consumer Price Index (CPI) to gauge inflation?