The Fed (and many other central banks) prefers to gauge inflation by looking at the core measure of inflation because
A) This measure is biased downward
B) It is required to by statute
C) By removing volatile food and energy prices, the core measure better reflects underlying inflation
D) None of the above

Question

Quizplus · Accepted Answer

The core measure of inflation excludes volatile food and energy prices, providing a clearer view of the underlying inflation trend, which is why it is preferred by the Fed and many other central banks.

The Fed (And Many Other Central Banks) Prefers to Gauge