The recent softer tone of the Fed regarding future policy rate has calmed the market to some extent, but there are many red flags. The Fed has currently estimated that 12-month personal consumption expenditures (PCE) inflation through October ran at 6.0 percent. The Core PCE inflation, (that excludes the food and energy inflation components), has shown a downward trend recently but still is quite volatile. Of course, food and energy prices matter a great deal for household budgets, but core inflation often gives a more accurate indicator of where overall inflation is headed. Fed has raised its target range for the federal funds rate by 3.75 percentage points since March’22.