Institution: For Walsh, turning to alternative inflation indicators may backfire

Golden Ten Data reported on April 27 that during the confirmation hearing for the nomination of the Federal Reserve chairman, Kevin Walsh stated that he favors focusing on trimmed mean inflation indicators to understand underlying price trends. Analysts at Wrightson noted that, given these readings have recently been lower than the overall inflation rate, Walsh may avoid citing these indicators in official policy decisions. Wrightson said that when it comes down to the wire, “We suspect that Walsh himself will act cautiously, avoiding creating the impression of selectively adopting favorable inflation indicators at a time when the public is generally dissatisfied with the cost of living.” Walsh has previously pledged to enhance the Federal Reserve’s credibility. The company pointed out: “Telling the public that high inflation readings are misleading is a hard sell.”