Warren Seeks Transparency on Changes to Fed-Favored PCE Inflation Gauge
Summary
- Sen. Elizabeth Warren called for details to be disclosed on changes to the calculation of the Federal Reserve's preferred personal consumption expenditures, or PCE, price index.
- The new methodology will be applied starting with August data, due for release in September, and could lower the PCE inflation rate by about 0.2 percentage point.
- The revision will affect how prices are measured for software, legal services and investment advisory services, but will not apply to the consumer price index, or CPI.
Forecast Trend Report by Period
Sen. Elizabeth Warren called for details to be disclosed on changes to the calculation of the personal consumption expenditures price index, the inflation gauge preferred by the Federal Reserve.
Walter Bloomberg reported on August 6 that the new methodology will be applied starting with August data, which is due to be released in September. Market participants say the change could lower the PCE inflation rate by about 0.2 percentage point.
Warren did not provide evidence of political interference, but said greater transparency is needed around the methodology change.
The revision will affect how prices are measured for software, legal services and investment advisory services. It will not apply to the consumer price index, or CPI.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.