Sara E. Millington

Through the federal funds market, commercial banks used to supply each other with overnight liquidity. But since the financial crisis, the banking system has been awash in reserves and the federal funds rate has been near zero, leaving banks little incentive to participate. Still, the market continues to operate, but it has changed.

There are two common measures of inflation in the US today: the Consumer Price Index (CPI) and the Personal Consumption Expenditures price index (PCE). The two measures, though following broadly similar trends, are certainly not identical.