Core Price Level

Think of it this way

It is taking the patient's temperature without counting the time they spent in the sun. What remains is the real fever.

What is Core Price Level?

The price index excluding food and energy. It is not that those two do not matter —they are among the things people feel most in their pockets— but that they move for reasons unrelated to monetary policy: a drought, an OPEC decision, a conflict on a shipping route. Removing them makes the underlying pressure more visible, and that is what a central bank can act on.

How to read Core Price Level

It is the basis for the year-over-year core figure. On its own it is almost indistinguishable from the headline index on a multi-year chart; what is interesting appears when comparing the changes, not the levels. Lag: none; here inflation is the consequence, not the cause.

What Core Price Level means for the market

Indirect, through the change calculated on it.

Where the money flows

Same case as the headline index: it is not a flow, it is the price of a basket. With the difference that this basket leaves out what rises for reasons that do not depend on how much money there is in the system.

What to watch in Core Price Level

Like the other raw index: it is there so you can reproduce the core calculation if you want to check it. What you look at is the change, not this level. If you came here looking for core inflation, the series you want is the year-over-year one.

The same index without food or energy, which are the two most volatile prices.