Trump’s Claim “Prices Are Coming Down Very Fast” Shattered By PCE Report

Let’s discuss the Fed’s preferred measure of inflation vs Trump’s claims.

PCE Year-Over-Year Inflation, PCE, PCE Services, PCE Goods, Core PCE

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 vs PCE Inflation Year-Over-Year

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 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.

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