Core-Cast shows how inflation components and themes are performing relative to what transpires when inflation is running at 2%

Core-Cast is our nowcasting model to track the Fed 's preferred inflation gauges before and through their release date.

The heatmaps below give a comprehensive view of how inflation components and themes are performing relative to what transpires when inflation is running at 2% .

Headline inflation has more downside risks than core over the near-term.

Food services inflation has been decelerating in the past couple of quarters , lagging the general deceleration in diesel prices.

Core PCE ( PCE less food products and energy) is running at a 4.24% as of July , 224 basis points above the Fed 's 2% inflation target for PCE .

The June-July run up in equity prices caused a spike in portfolio management prices in July PCE , pushing up the subaggregate.

Imputed financial services PCE inflation is more sensitive to the spread between deposit rates and the Fed Funds Rate .

Past Inflation Previews include November CPI Preview: Planes, Constraints , and Automobiles: What to look for in a hot November CPI Print.

The path to the Fed 's 2% PCE goals is getting clearer but not soon enough to forestall a July Hike.