Personal Consumption Expenditures excluding food and energy or “Core PCE”

Just like the Bureau of Labor Statistics publishes a CPI number excluding food and energy, the Bureau of Economic Analysis publishes the PCE number excluding food and energy. This “core” PCE number is what the Federal Reserve uses to set its inflation target. “That allows you to see a sort of basic trend of what inflation is doing in the consumer sector,” said Wasshausen. 

1. 
   Change in government spending and tax rates
   
2. 
   Set by the Government
   
3. 
   NO specific target
   
4. 
   Side effect on government budget/borrowing
   
5. 
   Strong political dimension to changing tax rates
   

1. 
   Change in interest rates/ money supply
   
2. 
   Set a Central bank
   
3. 
   Target inflation
   
4. 
   Side effect on exchange rate and housing market
   
5. 
   Mostly independent from the political process