Warsh’s Trimmed-Mean Inflation Lens Could Keep Rates Lower
Fed Chairman Kevin Warsh wants to pay more attention to inflation measures that strip out the most extreme price moves each month.
Several versions exist, all running below core. The most widely cited is the Dallas Feds trimmed mean, at 2.3% in April versus 3.3% for core PCE.
That distinction matters: if the Fed emphasizes a measure that is systematically cooler, the policy debate can shift toward lower rates sooner. But trimmed mean also tends to underestimate inflation, so the signal should be treated as fuel for easing—not proof that inflation is solved.
