Robert Kaplan warns trimmed mean inflation measure can miss crucial turning points
Updated
Updated · MarketWatch · Apr 29
Robert Kaplan warns trimmed mean inflation measure can miss crucial turning points
7 articles · Updated · MarketWatch · Apr 29
Kaplan highlighted that the trimmed-mean PCE inflation rate was 2.3% in February, below the 3% core PCE rate, and cautioned it may rise to 3%.
He argued that the trimmed mean, favored by Fed chair nominee Kevin Warsh, can understate inflation during rapid shifts, as seen during the 2021 pandemic surge.
Kaplan explained that the measure's methodology can exclude early inflation spikes, potentially delaying recognition of broader price increases and affecting policymakers' responses.
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