Please, answer to the questions and give summary:

Inflation

Two price indices measuring inflation are personal consumption expenditure and consumer price index. Headline and core measures of inflation over the last three years are provided in Tables 6 and 7, and Charts 6 and 7.

1.Is it important to compare headline and core price indices? What does each one tell you?

2.Based on core PCE deflator data, what is the current inflation rate? Do you expect it to change? Why or why not?

3.What factors might affect the price level?

4.Why are the CPI and PCE price indices different? Which one does the Fed focus on when making monetary policy decisions? What is the Fed's target inflation rate?