February 29, 2024· 50 min

What Really Goes Into the Fed's Favorite Measure of Inflation?

Skanda Amarnath Omair Sharif

Orality

Model

50%

Speaker Breakdown

HostTracy Alloway(2,009 words)

M:29%

GuestSkanda Amarnath(3,370 words)

M:27%

GuestOmair Sharif(2,779 words)

M:28%

Oral Indicators

Agonistic31%

literally, completely, basically

Engagement58%

you, our, your

Memory Aids100%

listen, now, okay

Repetition100%

know (100x), like (94x), about (70x)

Parallelism100%

And I'm Tracy Alloway...., But when we talk about inflati..., And the way to do it is just c...

Sound Patterns52%

53 question(s), alliteration: "markets move", alliteration: "barclays brief"

Formulaic Phrases8%

at the end of the day, you know what, i mean

Literate Indicators

Hedging10%

probably, maybe, appear

Passive Voice7%

was been, is focused, was focused

Abstract Nouns15%

investment, recommendation, inflation

Subordination6%

whereas, because, until

Sentence Length47%

Avg: 16.7 words/sentence

Word Complexity47%

investment, analyze, anticipate

Academic Markers0%

Impersonal Style42%

588 personal pronouns found

Descriptive Style100%

literally, completely, really

Description

The Federal Reserve has a goal of getting inflation down to 2%. But of course, there are a lot of different ways of measuring inflation. Many people know about the Consumer Price Index, and the various ways it can be sliced and diced. The Fed, however, focuses on a different index — Personal Consumption Expenditure — which differs from the CPI in a number of ways, both in terms of category weightings and methodological approaches. So why are there different measures of inflation? Why does the Fed prefer PCE? And how is PCE actually assembled? On this episode, we speak with Omair Sharif, founder and president of Inflation Insights, as well as Skanda Amarnath, executive director of Employ America. We explore these two different measures, the approaches for calculating them, and the weird quirks underneath the surface that makes them all so interesting and controversial. See omnystudio.com/listener for privacy information.

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