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Justin Wolfers points out that the Federal Reserve pays closer attention to core inflation, which excludes food and energy prices. He highlights that core inflation remains elevated, with a 0.3% increase this month, surpassing forecasts.
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Wolfers previously reported that U.S. consumer sentiment has fallen to its lowest level in 70 years, citing both economic issues and declining trust in Washington. In another recent note, he highlighted that the U.S. budget deficit has reached 6 percent of GDP, a postwar high outside of recession or war. Both trends add context to the current focus on inflation data.