Warsh says Fed will review multiple inflation measures

Federal Reserve Chairman Kevin Warsh said the central bank is preparing a new approach to how it measures inflation and uses data to guide policy. Speaking at the European Central Bank Forum in Sintra, Portugal, he said the Fed wants more timely tools to better understand the real economy. Warsh said five task forces are being formed to study Fed operations, including one focused on inflation measurement. The review could expand beyond traditional gauges such as the consumer price index and the personal consumption expenditures index to include alternative measures from regional Federal Reserve banks, surveys, and privatesector data. The article notes that different indicators are sending mixed signals. Some measures still show inflation above the Fed’s 2% target, while others suggest price pressures may be closer to normal. Warsh said the Fed’s criteria will change and become more responsive to current conditions as it looks for better data to support policy decisions.