Inflation
Consumer prices, PCE, how broad inflation is, what the market expects, real rates, and what a dollar still buys
Inflation
CPI, year-over-year change
Inflation (CPI, YoY)
3.7%
1 wk
↑ +0.4%
1 mo
↑ +0.4%
1 yr
↑ +0.7%
Source: FRED
Notes
- What is happening
- Consumer prices are rising 3.4% a year in August, with the core measure at 2.4%: above the 2% target for a fifth year.
- Why it matters
- Inflation is what forced the Fed to raise rates on 16 September, and what erodes the value of savings and fixed incomes month after month.
- What's driving it
- Tariffs passed into goods prices, energy costs, and services inflation that has not come down with the labour market.
- What to watch
- The breadth measure on this page: as long as most CPI categories rise above 2%, the headline cannot settle. A fall below 3% with breadth narrowing (76% of components above 2% in August, from 81%) would let the Fed stop after September's hike.
Inflation Persistence
The measures that strip out the volatile items: what is left is the inflation that lasts
Sticky-price CPI, ex food and energy
2.8%
1 mo
↑ +0.1%
1 yr
↓ -0.5%
Median CPI
2.6%
1 mo
↑ +0.0%
1 yr
↓ -0.9%
Trimmed-mean PCE
2.2%
1 mo
↓ -0.1%
1 yr
↓ -0.7%
Sticky and flexible prices
Source: Atlanta Fed, via FRED
Median and trimmed-mean inflation
Source: Cleveland Fed and Dallas Fed, via FRED
Notes
- What is happening
- Sticky-price CPI excluding food and energy is up 2.7% on the year in August, median CPI 2.6%, trimmed-mean CPI 2.6% and trimmed-mean PCE 2.2%. Flexible prices are up 4.9%.
- Why it matters
- These measures drop the items that move most and keep those that rarely change price: this is the inflation that remains when the shock has passed, the one the Fed can actually fight.
- What's driving it
- The gap between 3.4% headline inflation and 2.6% underlying inflation comes from flexible prices: tariffs on goods, energy, food. Sticky prices, led by rents and services, have slowed by a point since 2024.
- What to watch
- Median CPI below 2.5% would say the target is in sight once the tariff shock passes; sticky prices climbing back above 3% would say inflation has re-anchored itself.
Other Inflation Measures
The same series the Money Debasement index reads — shown here for the inflation picture on its own
PCE Inflation
PCE inflation, year on year
3.4%
1 mo
↑ +0.1%
1 yr
↑ +0.7%
Core PCE inflation, year on year
3.0%
1 mo
↑ +0.0%
1 yr
↑ +0.2%
Source: BEA, via FRED
Notes
- What is happening
- 3.4% year on year in August 2026 for the headline index and 3.0% for core, against 2.7% a year earlier. The BEA's annual revision of 30 September lowered the whole recent path: July, first reported at 3.7% and 3.3%, now reads 3.4% and 3.0%. After the 7.2% peak of June 2022, disinflation stalled around 2.5% through 2024-2025 without ever reaching target, and 2026 marks a reacceleration. This is the fourth consecutive year above 2%.
- Why it matters
- The personal consumption expenditures price index is the measure the Fed targets at 2%: broader than the CPI, weighted by what households actually buy, and revised. The version excluding food and energy is what the Fed watches for the trend.
- What's driving it
- Services inflation that never came back down, tariffs in goods prices and energy costs.
- What to watch
- Core is the figure that matters: at 3.0% it is higher than at any point between 2008 and 2020. The Fed made its choice on 16 September, raising rates 25 bp with a 2026 PCE inflation median of 3.7%; a sustained core move above 3.5% would set that choice against the cost of the public debt again — the direct link to the Fiscal Dominance page.
Breadth of Inflation
CPI categories rising above 2%
71%
1 mo
↓ -5%
1 yr
↑ +5%
Source: BLS, via FRED
Notes
- What is happening
- 76% in August 2026 — 16 categories out of 21, after 17 in July — against a 2010s average of 46%, 48% at the end of 2019 and 95% at the June 2022 peak. Only new and used vehicles, medical goods, alcoholic beverages and household furnishings are below 2%. Rent, electricity, gas, food, apparel, gasoline and transportation services are all above.
- Why it matters
- Narrow inflation — a few categories spiking, the rest flat — is a supply shock; broad inflation, where nearly everything rises, is monetary. This measure counts, each month, the share of the CPI's 21 expenditure categories whose price is more than 2% above a year earlier, unweighted: each category counts once.
- What's driving it
- Shelter, services, goods and now energy rising together: the tariff pass-through of 2025 widened inflation beyond services, and the 2026 oil surge (gasoline up 27% on the year) adds to it.
- What to watch
- Over 2010-2019 the measure never exceeded 60%: that is the ceiling of a normal inflation regime. Above 75%, as now, inflation has no sectoral culprit left — and that is precisely what the bond market has not yet priced.
Inflation Expectations (10-Year Breakeven)
10-Year Breakeven Inflation Rate
2.35%
1 wk
↑ +0.02%
1 mo
↑ +0.02%
1 yr
↑ +0.07%
Source: US Treasury / FRED
Notes
- What is happening
- 2.33% on 9 October 2026, against a 2010-2019 average of 1.99%, a trough of 0.50% in March 2020 and a 2022 peak of 3.02%. Despite four years of above-target inflation and a reacceleration in 2026, expectations have barely moved — neither the Fed's 16 September rate rise nor a 10-year above 5.2% shifted them: the market is betting the Fed will bring inflation back to 2% in the end.
- Why it matters
- The 10-year breakeven is the average inflation the bond market expects over the decade: the gap between the nominal Treasury yield and the yield on inflation-linked TIPS. It is the judge of the Fed's credibility — while it stays near 2%, investors lend to the Treasury without demanding a debasement premium.
- What's driving it
- Four years above target, against a Fed tightening again since 16 September and a real yield that still tempts bond buyers.
- What to watch
- The breakeven is the slowest line on the page, and therefore the most important: it says when confidence gives way. 2.5% would be a signal, 3% a break — at that level, in 2022, the market was already demanding compensation for debasement.
Real Rates (10-Year TIPS Yield)
10-year real yield (TIPS)
2.78%
1 wk
↓ -0.09%
1 mo
↑ +0.16%
1 yr
↑ +1.02%
Source: US Treasury / FRED
Notes
- What is happening
- 2.87% on 8 October 2026, against −1.19% at the August 2021 trough, 0.18% at the end of 2019 and a 2010-2019 average of 0.42%. The real rate passed the October 2023 peak of 2.52% after the Fed's 16 September hike, has added another twenty basis points since, and is at its highest since November 2008: savings are paid above expected inflation again, for the first time in fifteen years.
- Why it matters
- The 10-year real yield — that of TIPS, indexed to inflation — is what a risk-free dollar earns beyond inflation. A negative real rate is guaranteed debasement for the saver; a high real rate is the currency being defended. It is the index's inverted constituent.
- What's driving it
- Heavy Treasury supply, a rebuilt term premium and, since 16 September, a Fed raising its policy rate again.
- What to watch
- This rate is what separates the present episode from 2021: the same broad inflation, but a dollar that earns. A return below 1% — through Fed cuts or rising expectations — would tip the index towards its record, and that is exactly what the interest bill on the public debt calls for.
Purchasing Power Since 2019
Purchasing power of a 2019 dollar (cents)
75.1
1 mo
↓ -0.5
1 yr
↓ -2.8
Source: BLS, via FRED
Notes
- What is happening
- 75.6 cents in August 2026: prices are 32% higher than in January 2019. The loss ran at 2.5 cents a year through 2019-2020, then 12 cents in two years over 2021-2022, and continues at 2 cents a year since. In seven and a half years a quarter of purchasing power has gone — as much as in the whole 2010s.
- Why it matters
- This is debasement as a household sees it: what a January 2019 dollar still buys, measured by the consumer price index. Annual inflation rates come and go and are forgotten; the cumulative loss is never recovered — a rise in prices is not undone by inflation returning to 2%.
- What's driving it
- Cumulative inflation of 32% since 2019: the 2021-2022 surge first, then three years above 3%.
- What to watch
- At 2% inflation it would take 35 years to lose another quarter; at 3.4%, the current pace, under ten. The threshold to watch is 70 cents: it would be reached in 2029 if inflation stayed where it is.