Why interest rates don’t cool inflation enough: They hit the wrong places

Interest rates might not hit inflation where it hurts most.

Consumer prices aren’t slowing fast enough. The personal-consumption expenditures, or PCE, index, which is closely monitored by the Fed, rose 3.8% in May relative to a year earlier. In the eurozone, inflation was 6.1%. Price growth is down from its peaks, but that seems to be driven more by a reversal in commodity prices than by a cooling economy.