I'm So Tired of the Transitory Inflation "Debate"

The Federal Reserve is redefining inflation measurements in real time. When core inflation measures showed weakness in 2015 and 2016, they didn't celebrate median PCE as proof of control. Now that it serves their narrative, it's suddenly the "truer" picture. What they're performing isn't economics. It's the reshaping of what counts as real.

• The language used to describe inflation cannot be wrong by definition. Words like "transitory" and "tools" are articles of faith, not measurable concepts. You cannot prove them false, only reinterpret what they mean.
•  The Fed shifted which inflation metrics matter only when convenient. Median PCE wasn't mentioned as significant in 2015 when it ran hot. It became important once the headline numbers embarrassed official forecasts.
• Real inflation moves as rolling waves through different categories. First oil, then food, then housing. By the time you isolate enough "outliers," the underlying pattern disappears from the official story.
• The Arthur Burns playbook is instructive. He excluded oil after 1973, then food, then used cars, then jewelry. Eventually only 35% of the CPI remained, and that portion was rising double digits.
• The institutional structure cannot lose this debate until something more powerful replaces it. Until then, they will always win by redefining what the words mean. Market participants who act as if they believe this are the ones setting prices and expectations.