Which inflation metric is the US Federal Reserve’s preferred gauge for monetary policy decisions?

💡 Explanation:

The Federal Reserve's preferred gauge for measuring inflation and setting its 2% long-run target is the Personal Consumption Expenditures (PCE) Price Index. The PCE index is favored over the Consumer Price Index (CPI) because its formula accounts for changes in consumer spending patterns and includes a broader range of expenditures, such as those made on behalf of consumers.