Core PCE-CPI Gap Widens as Fed's RRP Buffer Empties

Core CPI cooled to 2.47% year over year in July, the kind of print that would normally clear the runway for a Fed victory lap. Core PCE, the gauge the Fed actually targets, told a different story: 3.29% year over year through June, more than 80 basis points hotter. That gap is the headline here, but it is not the whole story. Underneath it, the plumbing that kept money markets calm for three years of quantitative tightening has run dry, and the Treasury is refilling its checking account at the worst possible moment to test it.

For more on this topic, see our coverage of Breadth Broadens Into a Loaded Catalyst Week for Stocks , Core PCE Runs Hot as Fed's Repo Buffer Hits Zero , Fed's RRP Buffe…