Fed Balancing Act: Are They Falling Behind the Curve?

The video discusses the Federal Reserve's focus on maintaining a 2% inflation target, highlighting the differences between core PCE and CPI metrics. It explains how PCE measures what businesses sell, while CPI measures consumer purchases. The video also explores the scope and weight effects influencing these metrics, particularly in housing and healthcare sectors. The discussion includes the impact of government spending on healthcare inflation and questions the Fed's reliance on PCE as a comprehensive economic measure.

How does the weight of housing in PCE compare to its weight in CPI?

In what ways might the Fed's reliance on PCE be considered misguided?