The Great Inflation Debate

From an economist's point of view, the "core" rate counts more than the "headline." But the Fed will have to pay attention to both
Federal Reserve Chairman Ben Bernanke Win McNamee/Getty Images

If there's one thing Americans don't like, it's a cheater. And as far as many people are concerned, it's cheating to calculate the rate of inflation by deliberately excluding soaring food and energy prices. After all, the logic goes, we all have to pay for food and energy, so why ignore it when measuring inflation? Is this some kind of conspiracy to ignore the plight of the poor or to make the economy look healthier than it really is?

To continue reading this article you must be a Bloomberg Professional Service Subscriber.