Core PCE Runs Hot as Fed's Repo Buffer Hits Zero

Core CPI cooled to 2.47% year over year in July, the kind of number that would normally clear a path for the Federal Reserve to declare victory on inflation. Core PCE, the gauge the Fed actually targets, tells a different story: it held at 3.29% year over year in June, more than 80 basis points hotter than its CPI cousin. That gap is the story this week, and it is widening at the exact moment the Fed's money-market shock absorber has gone quiet. our Fed policy framework

Key Takeaways Core PCE ran at 3.29% year over year in June versus core CPI's 2.47% in July, an 80 basis point gap that undercuts the disinflation narrative. The overnight reverse repo facility has drained to $0.2 billion as of…