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DavidRFZ t1_jef81dj wrote

They are talking about “core” inflation.

The truth is that they report both! And they report dozens of splits of price data as well.

Central banks often like core inflation because food and energy prices can be very volatile and susceptible to changes in commodity prices that are not dependent the current state of the economy. Do they need to raise interest rates to slow the economy and bring down inflation is the main source of higher prices is due to OPEC or some drought? They get better data if the more volatile components are subtracted out.

But total inflation still gets the biggest headlines on news reports. If food or energy inflation persistently beats total inflation for long periods of time, there will be pressure to address that in other ways (oil reserves, trade, etc). But it’s still unlikely that the Fed will feel like they should slow the economy to fight it like they would if there was high core inflation.

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