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![MoHossain Avatar](https://lunarcrush.com/gi/w:24/cr:twitter::22736189.png) Mo Hossain [@MoHossain](/creator/twitter/MoHossain) on x 6303 followers
Created: 2025-07-17 00:12:41 UTC

The wedge between year-over-year core CPI and core PCE has nearly vanished, largely due to cooling housing inflation, which carries greater weight in the CPI. 

How soon might we observe shifts in capital allocation resulting from the One Big Beautiful Bill (OBBB)—particularly away from healthcare/Medicaid, nonprofits, education, immigration and student loans—toward other arguably more “productive” sectors/initiatives ? And how might such reallocations affect inflation dynamics?

Some analysts suggest core PCE could annualize around 3%, posing a challenge for the Fed’s policy trajectory. If inflation remains sticky despite easing housing costs, how might the Fed reconcile market optimism with the need for sustained policy restraint?

#InterestRates #Fed #Inflation #investments #Productivity

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**Related Topics**
[inflation](/topic/inflation)

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