Someone Is Wrong About Inflation. Is It You Or The Fed’s Preferred Gauge?
"Adding to consumers' concerns about a significant expected drop in income growth, year-ahead inflation expectations rose sharply, putting extra pressure on consumers' abilities to maintain their living standards", Richard Curtin, chief economist for the University of Michigan consumer sentiment survey, said Friday, in the color accompanying the final read for May. Consumers' mood darkened a shade from the preliminary report, as the headline index moved down to 72.3 from the 73.7 initial print.
2 thoughts on “Someone Is Wrong About Inflation. Is It You Or The Fed’s Preferred Gauge?”
The USA, like other governments, avoid admitting that inflation is different to the cost of living.
CPI is inaccurate during lockdowns. We have all seen the news of “the 90% economy” abroad. What if CPI continues to track the wrong basket under “the new normal?” In that case we’d see low measured inflation and loose policy would exacerbate felt inflation.
Data-driven! Got to do what the numbers tell us, right?