Core inflation is the inflation rate with food and energy prices left out, to show the underlying trend.
Food and energy prices jump around because of weather, wars and supply shocks. Removing them gives economists and the Federal Reserve a steadier read on where inflation is heading. Both CPI and PCE have 'core' versions.
Why it matters to you
When the Fed talks about inflation coming down, it usually means core inflation. That signal shapes decisions on interest rates, which feed into your borrowing costs.