Re:Inflation Is Falling Much Faster Than Most People Know
by dragonwriter on Saturday December 24, 2022 @11:53PM
(#34124400)
> The consumer price index has been relatively stable since the Fed started raising interest rates.
The PCE, which the Fed uses—not the CPI—as its inflation gauge for policymaking has not been flat (historically, the PCE and CPI have generally been pretty close, but the PCE shot up much more than the CPI in the recent inflation, and did not quickly drop and stay near zero monthly % change like the CPI in response to the Fed intervention [it was low in July and November, but not the intervening months.])
The consumer price index has been relatively stable since the Fed started raising interest rates.
https://tradingeconomics.com/united-states/consumer-price-in...
The generally quoted inflation rate compares the CPI now to this time last year – so until next June, it includes the increases that happened before the Fed decided there was a problem.
This is useful in a lot of contexts, but if you want to know whether prices will be higher next month, it doesn’t make a whole lot of sense to use a lagging indicator.