Investors had a little trouble today determining whether an uptick in the Fed’s favorite inflation gauge was actually good or bad. While the market ultimately decided in the negative, the debate itself reveals just how finely balanced the numbers and the mood are now.

First, the numbers. Yes, it’s not great to see core PCE edged up in August despite all the interest rate increases up to that point. We’re now back in the 7% annualized inflation zone, which is not great.

It also isn’t great when you consider that in July core PCE was basically flat and is now moving in the wrong direction again. Hotter-than-expected inflation will prompt harsher-than-hoped Fed intervention.

But there’s still a ray of hope, which helps explain why the market spent most of the day in positive territory before the negative voices took over again ahead of the weekend. On a trailing six-month basis, core inflation is still tracking at a 4.7% annualized rate . . . which is close enough to where the Fed wants it to get by the end of the year.

Remember, the Fed’s inflation target for the end of 2022 is 4.5%. We actually exceeded that level on the “cool” side (4.3%) back in July, so we know it’s possible in this environment to make the Fed happy, even if it’s only a couple of weeks.

Even now, averaging that low number against today’s miss to the upside yields a composite 4.5% trailing average . . . hitting the Fed’s target. Or if you do the math a little differently, looking at only the month-to-month price increases, you end up with a significantly lower annualized inflation trend.

We’re not there yet. Don’t get me wrong, inflation hawks had a right to get angry with this morning’s relapse, and there’s a reason stocks ended up down.

But we’re getting close. The August number doesn’t factor in last week’s big 0.75 percentage-point rate hike. By the time we see the September number, we’ll already be on the verge of the November policy meeting.

If inflation keeps tracking roughly where the Fed has projected, I think it’s logical to anticipate interest rates tracking right along with the Fed’s map of the future. That implies that the overnight end of the curve will climb another 0.75 point in November and then another 0.50 point in December.

It’s tough medicine, but market players have already priced that rate trajectory into their calculations. And if inflation is already roughly where it needs to be, that means rates don’t have to accelerate beyond that projected path.

That’s the biggest fear factor hanging over Wall Street these days. But as long as the September number points back in the right direction, we’ll be able to write off August as a blip.

Won’t that be nice? We just have to get there first.