Warsh’s Inflation Critique Ignores Some Basic Facts

With so much attention on Federal Reserve independence, US senators spent relatively little time at a confirmation hearing Tuesday probing Kevin Warsh on his call to overhaul inflation data. The general ideas outlined by the would-be Fed chair hold inklings of promise, but Americans should be wary of his real motivations when it comes to questioning the integrity of our data on consumer prices.

It’s important to note the partisan context in which this all came up. Senator Catherine Cortez Masto, a Democrat from Nevada, correctly noted that inflation has been elevated for five years. As she put it, inflation measured by the core personal consumption expenditures deflator — a favored Fed measure — had been running around a percentage point above the 2% target. She asked Warsh whether he agreed that tariffs were some part of that.