Economists: The alternative inflation indicator favored by Walsh is "unreliable," and we hope someone will challenge it

Golden Ten Data reported on June 16 that Federal Reserve Chairman Waller has expressed a preference for adopting another inflation measure—the "trimmed mean PCE inflation," a metric that removes extreme values before calculating the weighted average. Brian Bethune, an economics professor at Boston College, stated that currently the trimmed mean PCE is not the most reliable indicator. In short, this metric works best when inflation shocks are similar to those during the 2009–2019 period (that is, before the 2020 COVID-19 crisis), because there was a good balance between positive and negative shocks during that time. However, when price shocks are mainly due to positive factors—such as supply shocks, tariffs, surging oil prices, or major special sports events (like the World Cup)—this indicator tends to underestimate inflation. “Therefore, I hope someone will challenge him on this,” Bethune said. But regardless of which indicator is referenced, U.S. inflation remains above the Federal Reserve's 2% target—as it has been since the spring of 2021.