ECB's Lorenzo Bini Smaghi Says Central Bankers Need To Ignore Core Inflation
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Core inflation is not a good indicator of where headline inflation is going and, therefore, it should be ignored when making monetary policy decisions, according to the ECB's Lorenzo Bini Smaghi.
Smaghi, writing in The Financial Times, argues that excluding food and energy costs may make the index less volatile, but it also ignores the certain long-term trend that food and energy prices are on the rise.
Smaghi says that, since food and fuel prices starting rising in the late 90s, core inflation has become a less useful measure of inflation overall.
Read the full piece at The Financial Times >
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