Macro — inflation
Core CPI inflation
Core CPI
What it is
Annual change in CPI excluding volatile components (food and energy). Gives a more stable view of underlying inflation dynamics, without the noise of energy or agricultural shocks.
How to read it
When Core CPI stays stuck above the 2% target despite headline CPI dropping, inflation is anchored — services, wages, shelter. Harder to break. When both fall together, disinflation is solid.
Common reference points
- Comfortable for the Fed< 2.5%
- Above target2.5 – 4%
- Persistent inflation4 – 6%
- Extreme> 6%
Orders of magnitude, not a rule: the same number does not mean the same thing from one sector to the next.
What it does not tell you
Shelter composes ~35% of Core CPI and is measured with enormous lag — it keeps rising while the actual housing market slows. Useful at 6-12 months, less so short-term.
Other measures — Macro — inflation
Educational content. Polaris is not a registered investment adviser and makes no recommendation.