The core measure is considered a better guide to the direction of future inflation. You might wonder why it is that the Fed doesn’t just target core inflation in measuring progress toward our price stability goal.
There are some good reasons for keeping the focus on overall inflation, and in front of an audience of people who pay a lot of attention to food price inflation, I thought I would take a couple minutes to explain why I consider food and all of the components of inflation to be so important in my approach to setting monetary policy.