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C40 · THE FED'S OFFICIAL TARGET GAUGE

PCE inflation, headline, year over year (Fed's target measure)

4.07
EXTREME ROBUST absolute thresholds · z 0.33 (context) DRS 95 monthly as of 2026-05-01

Where it sits: 4.07 against fixed thresholds (2.5/4). higher than ~73% of its full record.

The full history

1960 high 11.60 · low -1.47 · now 4.07 · 9 recessions shaded 2026

How it is read

What it measures
the Fed's official target gauge
Where it sits
4.07 against fixed thresholds (2.5/4). higher than ~73% of its full record: at the 73th percentile of its full record.
z vs. its window
0.33 (strain side: both). 797 observations in the window.
State rule
Scored against absolute thresholds: <2.5 calm, 2.5-4 watch, >4 extreme. Because the reference window is poisoned by the 2020-23 spikes, the z-score is shown for context but does not gate the state.
Confidence
ROBUST : a primary official series, mechanically reported.
Reliability (DRS)
DRS 95: Computed: 100 × (PCEPI(t) / PCEPI(t−12m) − 1). The Federal Reserve's official target measure: the 2% target applies to HEADLINE PCE; when PCE runs persistently above 2% the Fed is off-mandate. Differs from CPI (C2) in weights (less shelter, more healthcare), scope (PCE includes third-party purchases like employer health insurance) and formula (chain-weight vs CPI's Laspeyres), and typically runs ~0.3–0.5pp BELOW CPI, the methodological wedge that R11 scores. Strain is declared BOTH tails to match the symmetric engine and C2/C3 (the addendum frames it one-sided as 'above target'): persistent overshoot and deflation are both strain, and the 2% line is additive display context, not the state gate. Scored against the full record (1960+). The core PCE sibling is C3. BEA-produced.

Where it comes from

DERIVED ↗ Every number on this site is reproducible from this primary source.

What it read at past stress points

Lehman, Sep 2008 3.67 ◆ WATCH
Q4-2018 selloff 1.86 · CALM
Curve inversion, Aug 2019 1.43 · CALM
COVID crash, Mar 2020 1.17 · CALM

Questions it helps answer

  • Prices : Are prices behaving, and believed?