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As the Federal Reserve charts a new direction on monetary policy, Kevin Warsh is navigating a challenge that precedes any rate decision: which inflation signals to rely on.
Warsh has argued publicly that inflation is a "choice" — a framing that, on closer inspection, applies with equal force to the way inflation itself is measured.
A Metric Problem With Policy Consequences The choice of inflation gauge is not a technical footnote.
Different measures can read the same underlying economy in materially different ways, and the signal a central banker privileges will shape the response.
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