Insights from Wall Street Journal journalist Nick Timiraos, often called the ‘Fed’s mouthpiece,’ highlight the divergence between core PCE and core CPI inflation indicators for August. This divergence is marked by significant price declines in several high-weight categories within the PCE index, widening the gap between core PCE and core CPI readings. Analysts are relying on CPI and PPI data to predict a rise of approximately 0.20% month-over-month for the Fed’s preferred core inflation measure (core PCE), compared to the 0.35% increase in CPI. This suggests a likely annual rate of 2.9%. Notably, core goods prices within the PCE index are projected to have decreased in August, while CPI showed an increase in prices. Overall, price increases are anticipated at 0.24% month-over-month, bringing the annual rate to 2.7%.