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Originally Posted by TwistedChief
I think you may have misunderstood. What this person was almost certainly referring to is the fact that the Fed targets core inflation (actually core PCE which is a bit different from core CPI primarily due to the way it treats at housing costs and medical expenses) and that those core measures exclude food and energy. The rationale is that they’re volatile and subject to supply/demand factors that the Fed can’t easily control and that short term disruptions usually revert.
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That is precisely what he was saying. I thought it wasn't a great look for the Fed to be out there shouting from the rooftops that there was no inflation - full stop - when the most affected people (paycheck to paycheck folks) were seeing their dollars only stretch 70% as far as they used to.
Quote:
Originally Posted by TwistedChief
Classic (error) case is the ECB who targets headline inflation (HICP) and they hiked into the housing crisis in 2008 because energy was spiking. This was not a welcome decision.
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That's fair. And to be fair here, I'm not suggesting the Fed fix anything. I just think there should be better metrics and a more clear picture of what's actually happening out there.