Using Trimmed Mean PCE Won't Solve The Inflation Problem

Kevin Warsh, incoming Fed Chair, is considering making the Dallas Fed's Trimmed Mean PCE the primary inflation gauge. The measure is running at 2.4% y/y, below Core PCE's 3.2% and closer to the Fed's 2% target. The shift would matter for policy interpretation and could influence market expectations around the Fed's inflation stance.

Analysis

Kevin Warsh, incoming Fed Chair, is considering making the Dallas Fed's Trimmed Mean PCE the primary inflation gauge. The measure is running at 2.4% y/y, below Core PCE's 3.2% and closer to the Fed's 2% target. The shift would matter for policy interpretation and could influence market expectations around the Fed's inflation stance.