world-economy

Fed Under Warsh to Reassess Inflation Measurement Methods

Federal Reserve Chairman Kevin Warsh is directing a comprehensive review of how the central bank measures and responds to inflation, signaling a departure from traditional metrics. The Fed has established five task forces to examine various functions, with two specifically focused on data collection and inflation measurement. Warsh indicated the effort could introduce alternative inflation gauges beyond headline and core measures. This would seek a fuller picture of consumer cost-of-living pressures. Inflation has remained elevated for five years. Speaking at the European Central Bank Forum on Monetary Policy in Sintra, Portugal, Warsh said the Fed aims within nine to 12 months to employ enhanced methods for real-time assessment of economic conditions. The shift could reshape how monetary policy decisions are triggered and implemented going forward.