According to a research report released by the Federal Reserve Bank of St. Louis, adding food and utilities to the core PCE price index, which the Fed closely watches, could more accurately measure underlying inflation. Under this proposed revision, only energy goods such as gasoline would be excluded from underlying inflation. The report concludes that it is reasonable for the Fed to ignore these items when assessing medium- to long-term inflation targets, as they are closely tied to global crude oil prices and exhibit the most severe short-term volatility. The current core measure also excludes food and energy services, leaving out about 13 percent of consumer spending. Excluding only energy goods would keep the exclusion to less than 3 percent of consumer spending, creating a more stable and realistic gauge. Fernando Martin, senior economic policy advisor at the St. Louis Fed, explained that based on the latest May data, the revised PCE inflation rate stood at 3.36 percent year-on-year, differing from the current headline index of 4.1 percent and the core index of 3.4 percent. The Fed continues to debate the best way to measure inflation, and Fed Chair Powell has assigned this issue to one of the working groups.