Fed Chief Powell's Preferred Inflation Gauge 'Unreliable,' Boston College Economist Questions on June 16

According to Boston College economist Brian Bethune, the trimmed mean PCE inflation index favored by Federal Reserve Chair Jerome Powell is not a reliable indicator. Bethune noted that while the gauge performs well when inflation shocks resemble patterns from 2009-2019, it tends to underestimate inflation when price pressures stem from positive shocks such as supply disruptions, tariffs, oil price spikes, or major events. "I hope someone challenges him on this," Bethune said. U.S. inflation remains above the Fed's 2% target since spring 2021.
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