Inflation can be measured against two major price indices: the consumer price index (CPI) and the personal consumption expenditures (PCE) index. To measure the rate of inflation for a given period, subtract the index price at the beginning of the period from the price at the end, then divide that number by the beginning price. Although the CPI is more widely used to measure inflation, the Federal Reserve bases its inflation metric on the PCE, and it uses several variations to measure different types of inflation.