Economy
Wednesday, 7/22, 07:18 PM
What is core inflation, and why central banks strip out food and energy
- Every inflation release has two numbers: the headline rate everyone quotes, and a quieter one called core inflation that leaves out food and energy.
- Central banks often care more about the second, because the volatile items it removes can hide the real trend in prices.
- Knowing the difference explains why a falling headline is not always good news.