As 2024 has progressed, economic data–especially inflation data–have made it increasingly clear that rates will not be coming down nearly as soon as the Fed (and the market) expected. Rates are driven by multiple factors.  At present, inflation is chief among those, followed by the economy.  In general, higher inflation and economic strength coincide with higher rates.   Inflation and economic data evolved in such a way as to offer some light at the end of the high rate tunnel at the end of 2023.  Even the Fed acknowledged the shift by lowering its 2024 rate projection by half a percent in December.   But 2024 has proven to be a frustrating year so far for everyone who’d been hoping that inflation and rates were finally on the way back down.  We weren’t necessarily expecting to see any new fireworks this week, but we got them anyway. The trouble began on Thursday morning with the release of the quarterly GDP data.  One component of GDP is “personal consumption expenditures” (PCE).  One manifestation of the PCE data is a price index which in turn has a variation that excludes food and energy to give us the Core PCE Price Index. Core PCE is akin to Core CPI and it happens to be preferred by the Fed when it comes to tracking the 2% inflation target.  There are several different Core PCE measurement methods, which can make things fairly confusing on weeks when the data is released.  They include: