Even when temporary outlier categories are out of the picture, prices still rose more than the Fed’s 2% target in April.
The central bankers over at the Federal Reserve, famously, have a favorite measure of inflation: the personal consumption expenditures price index. Last week, at it’s latest reading, the PCE sat at 3.8% and 3.3% for “core” inflation — both well above the Fed’s 2% target.
New Fed Chair Kevin Warsh might have his eye on a different number. At his confirmation hearing in April, Warsh said, “the measures I prefer are looking at things called trimmed averages.”
Trimmed averages, also called trimmed means, is an inflation measure that tries to exclude price jumps, said Tiffany Wilding, an economist and managing director at PIMCO.
“When you and I are paying for our streaming, you know, our Disney Plus … it’s not like we’re getting incremental price increases every month,” she said. “They have these bigger adjustments, maybe once a year or once every several years.”
