World Perspectives

Inflation Disconnect; Economic Opinions

Inflation DisconnectEconomists including those at the Federal Reserve use so-called core inflation when assessing the level of rising prices in the economy. Core inflation excludes food and energy prices since they are considered more volatile, and less directly impacted by the Fed’s monetary policy levers. However, that has created a powerful disconnect in this year’s political campaigning. While Democrats are touting the decline in inflation, voters are still upset about it because their grocery prices continue to climb, albeit at a slower rate. The current political tactic is to blame the processing and retailing ends of the food value chain, but some argue there is a need to more directly address the causes of food inflation. Econo...

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