Core CPI vs Headline CPI: Which Should Traders Focus On?

One of the debates among macro traders is whether to focus on Headline CPI (includes everything) or Core CPI (excludes food and energy) when assessing market impact. **The argument for focusing on Headline:** - Consumers pay headline prices — politically and socially relevant - The ECB, BoE, and many other central banks target headline inflation - When headline spikes (e.g., energy shock), political pressure on central banks is based on headline, not core **The argument for focusing on Core:** - The Fed explicitly watches PCE (similar to core measures) more than headline - Food and energy are supply-driven — monetary policy can't directly control them - Core provides cleaner picture of demand-driven inflation **My view:** Watch both, but weight Core more for USD and rate implications. Watch Headline for gold and energy-linked trades (oil, CAD). Do you pay more attention to Core or Headline CPI when trading? And has that view been validated by market reactions you've observed?