The changes are entirely defensible on technical grounds but come at a fraught political moment.
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Lindsey Bailey/Axios
Changes to the methodology underneath the Federal Reserve's go-to inflation measure are on track to make the numbers look a couple of ticks better later this year.
Why it matters: The changes are entirely defensible on technical grounds and should make the Personal Consumption Expenditures Price Index better able to mirror overall price dynamics over time.
Federal Reserve's preferred inflation gauge is getting a methodology makeover, and the numbers will look better
Bureau of Economic Analysis overhauls PCE inflation methodology ahead of September data release
US inflation is running hot, so why not change the way it is measured?
Fed to adjust inflation measurement, potentially influencing rate cuts this year
Federal Reserve's inflation gauge revamp may curb interest rate hikes
The BEA is revising PCE inflation methodology, with analysts expecting a 0.2 percentage point reduction in core readings when…
The BEA is overhauling PCE inflation methodology for software, legal services, and portfolio management, potentially shaving 0.2…
Both headline and core Personal Consumption Expenditures reached their highest year-over-year readings in about three years.
If Kevin Warsh can adopt the trimmed mean as the Fed’s key inflation metric, Trump’s inflation problem will almost disappear.
"When the data doesn’t cooperate, just change the data."
Fed plans to adjust inflation measurement, potentially affecting rate cuts. Rate cut by October 2026 at 13.7% YES.
