from Zero Hedge
Submitted by Joseph Carson, former chief economist at AllianceBernstein
At this week’s Fed’s annual Jackson Hole conference Federal Reserve Chairman Jerome Powell is expected to announce a new policy approach that is intended to give policymakers more flexibility and time to achieve their inflation mandate. The irony is the proposed change is not necessary as the inflation mandate has been met. The problem is policymakers are not aware of it.
Inflation Measurement
The Federal Government statistical branches publish several measures of inflation. Among the most important are the consumer price index (CPI) and the personal consumption deflator (PCE). Accuracy is the most important criterion of inflation measurement, and both the CPI and PCE fail badly on this basic principle.