US Economy and Globalization Part 17 of 17
US Economy and Globalization Part 17 of 17
An additional Trading Patterns drawback is that while the theoretical virtues of trimmed mean measures may appeal to central bank aficionados and econometricians, they may fail to resonate with the people we serve. Humansreal people like my father and others who appreciate brawls, beer and bikinisexperience inflation and develop inflationary expectations based on what they see and experience in the marketplace and read in the papers. To people who drive to work, air-condition their home and eat, ex-food, ex-energy measures or trimming this or that out of a price index is nonsense. Central bankers must be attentive to this sensitivity if they are to maintain the public’s confidence.
In formulating and making my arguments at the FOMC table about the direction of inflation, I draw on all three measuresthe headline, the core and the trimmed mean numberin making my recommendations on monetary policy. I also draw on an intrinsic admiration for the dynamism and constant inventiveness of a society that can transform the poor and the luckless, like my own family, into middle-class prosperity, time and time again. And presently Part-time Trading Profits, viewing the U.S. economy through the lens of globalization, I find that there is greater symmetry of risk between growth and inflation than is commonly surmised.
I will stop here and, in time-honored central banking fashion, now do my best to avoid answering your questions.