Daily Archives: May 24, 2011

Is The Core Inflation Concept Rotten?

St. Louis Fed President James Bullard recently attacked the concept of core inflation, which excludes volatile food and energy prices. The “core is rotten,” he argued in a speech last week. “One popular argument for focusing on core inflation is that core inflation is a good predictor of future headline inflation,” he said. “I think this is wrongheaded, as well as wrong.”

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