Connect with us

Corporate Finance

This measure of U.S. inflation isn’t running so hot



The Federal Reserve is not all that worried about inflation because the central bank thinks it’s not as bad as it looks. And an obscure inflation measure that’s closely followed by the Fed appears to support its view. The Cleveland Fed’s so-called trimmed-mean inflation index rose 0.4% in May, but it’s only up 2.6% in the past year. By contrast, the better known consumer price index has climbed at a 5% yearly rate. The Cleveland index strips away the products or services that have experienced the biggest price swings to try to figure out the underlying rate of inflation. Inflation has clearly risen by any measure, but the Cleveland Fed’s gauge suggests to top central bank officials that price pressures aren’t a big long-term problem.

Continue Reading