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Why the Fed must change how it targets inflation (ft.com)
4 points by belter 6 months ago | hide | past | favorite | 2 comments



>The Fed switched to focusing on PCE inflation in 1996 under then Chair Alan Greenspan, after a commission had found that CPI had overstated inflation by an average of 1.1 percentage points per year.

As we now know, that commission was so misguided because the CPI was actually underestimating the financial devastation endured by Americans as the purchasing power of their dollars was continuously declining.

This could be another good opportunity to see if there is any interest in where the CPI came from to begin with?


Weird: the article doesn't put acronyms in parentheses following thier first use. Is that normal? Or just a poor article?

https://archive.ph/5ajCE




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