Tracking the Fed’s Progress on Disinflation

Headline inflation, which refers to the 12-month increase in the Consumer Price Index (CPI), increased 9.1% in June 2022 — the highest rate since 1981 — before the U.S. economy began the fraught process of disinflation.1

Disinflation means the rate of inflation is decreasing. Prices may still be rising overall, but at a slower rate than before. It shouldn’t be confused with deflation, which means the inflation rate is negative, because prices are generally falling.

The Federal Open Market Committee (FOMC) is raising the federal funds rate in a steadfast effort to reduce consumer demand and bring inflation down to its 2% target. Along the way, many economists, businesses, and investors are watching key inflation measures for signs of easing price pressures.

Of course, almost everyone is wondering how quickly the rate of inflation will fall back to normal and how high interest rates will rise in the meantime.

Where to Look

The CPI tracks the cost of a fixed market basket of goods and services purchased by consumers. As such, it captures the prices paid for the same items over time, but it does not reflect changes in consumer behavior and can be unduly influenced by extreme price swings in specific categories. Core CPI strips out volatile food and energy prices.

The Fed’s preferred gauge for its 2% target is the Personal Consumption Expenditures (PCE) Price Index. The PCE price index is even broader than the CPI, and it adjusts for shifts in consumer behavior, such as when shoppers purchase less-expensive items instead of others that become too expensive.

The Producer Price Index (PPI) measures the wholesale prices that producers charge businesses and others for goods and services. A set of underlying indexes captures prices through all stages of production — for raw materials, intermediate goods (used to produce other goods), and finished products. The PPI is often considered an early warning of inflation pressures, but it does not always anticipate changes in retail prices.

Not Your Typical Gauge Gap

In late 2022, the difference between annual inflation as measured by the Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) Price Index was the widest it has been since the 1980s.

12-month change in prices

In late 2022, the difference between annual inflation as measured by the CPI and the PCE Price Indexes was the largest since the 1980s.

Sources: Bureau of Labor Statistics and Bureau of Economic Analysis, 2023 (data through April 2023)

Underlying Trends

In addition to the overall inflation rate, price indexes have revealed — and obscured — some meaningful trends in specific corners of the U.S. economy.

Goods deflation. With most supply chain issues resolved and global shipping costs back to pre-pandemic levels, the prices of many goods have stabilized, and some have begun to fall. For the three months ended January 2023, core goods prices fell at an annualized 2.1% rate.2

Services inflation. Meanwhile, consumer demand has shifted back to services. A competitive labor market has also pushed up workers’ wages, which represent a larger share of costs for businesses in service industries.3

Shelter’s influence. Housing costs make up about one-third of the Consumer Price Index by weight, and they were responsible for more than 54% of the rise in core CPI in April 2023.4 New rents and home prices have been slowing since mid-2022, but because of the way data is reported, it can take nearly a year for those changes to be reflected in the CPI. Shelter costs have less impact on the PCE price index, where they account for just 15%.5

These trends have drawn attention to a metric dubbed “supercore” services inflation, which excludes food, energy, goods, and shelter. Supercore was running at about 4.6% in April 2023, lower than the core CPI of 5.5%, but still well above the Fed’s target.6–7

When setting monetary policy, Fed officials must sift through a wide variety of price data, in addition to surveys of inflation expectations — which indicate consumers’ confidence in the Fed’s ability to control inflation. The committee must also consider how rate hikes might impact employment.

ENGLADE Insurance & Financial Services | Baton Rouge, LA

What is Financial
Peace of Mind?
Schedule a Consultation

A strong foundation is the key to creating long-term stability....

Here at ENGLADE Insurance & Financial Services, we focus on the client and what is in their best interest. We take a extensive approach to get to know the person and what are their goals before we make any recommendations. We collaborate with your trusted confidante to make sure everything is taken into consideration and nothing is left out.

We understand a sound financial strategy starts with a solid foundation. Life insurance is simply a piece of paper that says, "I love you." Our primary focus is to help our clients act on that love.

No matter where you are in life or how much preparation or thought you have or have not done, if you want to pursue your financial health, we would love to meet you.

Meet Our Team Schedule a Consultation

Meet Our Team

Matthew Englade

About Matthew

Angela Englade

About Angela

Jacob Ashford

About Jacob

Matthew Englade

Matt graduated in 2008 from Southeastern Louisiana with a bachelor's degree in business. He started his career in financial services, working as a staff member with Delahaye and Associates, where he eventually became a partner.

In 2022 he formed Englade Insurance and Financial Services, where his primary focus is serving his client’s best interest. “But even if you should suffer for what is right, you are blessed.” 1 Peter 3:14

Matt is a resident of Central, LA and enjoys spending time with his wife, Angela, and three children. He also enjoys coaching middle school basketball and giving back to his local church.

Jacob Ashford

Jacob is currently a student at Southeastern Louisiana University and is studying in the College of Business as a Marketing Major.

Jacob pursues his career by working with Matt and Angela in their mission to spread financial sustainability with their current and future clients. He also donates his time to the Southeastern's College of Business by participating in numerous career services for the city of Hammond.

Having two younger sisters, Jacob understands the importance of protecting family values and leading a path to a secure future.

Nathan graduated from Texas A&M University Class of 2006 with a degree in Agriculture Leadership & Development. Nathan has been in public service as a firefighter since 2008. In addition he and Katherine have started, operated, purchased, and sold multiple small business’. Through his experiences; Financial Services has been a lifelong pursuit for Nathan and he is excited to be a resource for people like you, your family, and your business.

Angela Englade

Angela graduated from Southeastern Louisiana University with a Bachelor of Science degree in Nursing. She worked as a Labor and Delivery nurse for 14 years. She decided to continue her love for caring for others through helping people obtain financial health and wellness.

She joined Englade Insurance and Financial Services to guide Matt's clients on becoming aware of potential roadblocks and achieve financial peace of mind. In her free time, she enjoys spending time with her family and exercising.

Along with Matthew, she volunteers many hours to local charities to give back to the community.

Eve is happily married to her best friend Rick since 2012. They enjoy recreational trips like hiking and camping, visiting the beaches in the Gulf of Mexico, and trips to Walt Disney World. They are active in their congregation, donating their time and effort to help run the Audio/Visual presentations for services. She is grateful for all God has given her and believes all the glory goes to Him.

Core Services

Map of Licensed States

Englade Process


Additional Resources coming soon!


Community logo

Matt is a board member of CALEF and is involved committed to its long-term success. The mission of CALEF is to provide police, fire and EMS personnel with the safety equipment they need to serve and protect with excellence. We provide all-day rifle protection and other safety equipment to local law enforcement, fire and EMS personnel. CALEF believes that communities are safer and stronger when local law enforcement, fire and EMS personnel are properly equipped to do their job.

Community logo

Matt and Angela are active members of the church and school communities of St. Alphonsus Liguori Catholic Parish. Their mission is to form students in the Catholic Faith spiritually, academically, physically, and culturally in an environment of academic excellence. St. Alphonsus Liguori Catholic School is committed to providing a positive, faith-filled environment for children to learn. Our comprehensive curriculum is designed to promote academic excellence and the spiritual growth of our students, coupled with an appreciation of how service to others makes the world a better place. We strive to expand their potential to become leaders.

Client login

New York