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How Energy Prices Are Reshaping the Feds Inflation Forecast
Description
Episode 78 of The Federal Reserve Podcast with Fexingo. As of June 27, 2026, the Fed faces a new complication: energy prices are climbing again, just as core PCE hits 3.4 percent—the highest since October 2023. Lucas and Luna break down the May core PCE print, the 10-year breakeven inflation rate dipping to 2.20 percent, and what the Strait of Hormuz tensions mean for the Fed's path forward. They discuss how the FOMC is interpreting this data, whether the Fed's preferred inflation gauge is losing its predictive edge, and the risk of an energy-driven stagflation scare. This episode drills into the specific channel through which oil and shipping costs are feeding into core goods and services, and why the Fed may have to hold rates higher for longer even if the economy cools. No hot takes—just a focused look at the numbers and the decisions ahead.