The Three Measures
CPI, from the Bureau of Labor Statistics, tracks the prices urban households pay for a fixed basket of goods and services. It rose — in the year to —.
Core CPI removes food and energy, whose prices swing with weather and oil, to show the underlying trend: —.
Core PCE, from the Bureau of Economic Analysis, measures prices across all consumer spending, including what is paid on households’ behalf such as employer health insurance. It rose — in the year to —. The Federal Reserve’s 2% target is defined on headline PCE, which includes food and energy; it watches core PCE most closely because it is a better guide to where inflation is heading.
Inflation, Year Over Year
Monthly readings over five years.
Why the Measures Differ
Weights: housing is roughly a third of CPI but a much smaller share of PCE, so rents move CPI more. Scope: PCE includes spending that households do not pay directly, like medical care paid by insurers. Formula: PCE adjusts as people switch to cheaper goods when prices rise, which CPI does more slowly. Over long periods those differences have left CPI running a few tenths of a point above PCE, though the gap can flip for months at a time when items weighted more heavily in PCE, such as health care, rise faster.
What the Bond Market Expects
The 10-year breakeven, the gap between ordinary and inflation-protected Treasury yields, shows the average inflation investors are pricing for the next decade: —. When it rises, investors think inflation will last; when it stays near 2–2.5%, they trust the Fed to bring it back.
Takeaway. Watch core PCE for what the Fed will do, CPI for what households feel, and the breakeven for whether markets believe the Fed.
Figures in copper come straight from FRED and update every weekday; other figures are as of October 21, 2026. For education only, not investment advice.