Fed's Waller Widens Inflation Lens Beyond Standard Measure

Federal Reserve Governor Christopher Waller stated that he tracks broader inflation gauges beyond the standard personal consumption expenditures (PCE) price index when assessing price pressures in the economy.

Waller explained that the PCE index has limitations in capturing certain dynamics such as housing costs and service-sector pricing. He emphasized that he reviews alternative measures, including the Consumer Price Index (CPI), the trimmed mean PCE, and the Dallas Fed's trimmed mean inflation rate, to gain a fuller picture.

The comments come as the Fed navigates a delicate balancing act between controlling inflation and supporting economic growth. Waller's remarks suggest that internal policy discussions may consider a broader set of data than the official PCE target implies.