Has the Fed Quietly Raised Its Inflation Target? (CME Group)

Bullish Gator

With PCE at 3.7% and inflation above 2% for five+ years, did the Fed implicitly adopt a higher inflation target and what should investors do?

Editorial companion

What stands out

Bloomberg asked a simple but consequential question after Personal Consumption Expenditures (PCE) inflation hit 3.7% in July and prices have run above the Federal Reserve’s 2% target for more than five years: have policymakers quietly reset the goalposts? That matters because the answer alters how traders price interest-rate futures and options, the very products that fuel CME Group's (CME) revenues. The program, presented by CME Group, is a reminder that exchanges are where policy ambiguity turns into traded risks and fees.