PCE and CPI inflation differentials: converting inflation forecasts.(Personal Consumption Expenditure Price Index)(Consumer Price Index) From: Economic Review (Kansas City) | Date: January 1, 2008| Author: Hakkio, Craig S. | COPYRIGHT 2008 Federal Reserve Bank of Kansas City. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group.Copyright information

The Federal Reserve recently announced it will begin to release quarterly inflation forecasts based on the Personal Consumption Expenditure Price Index. As Chairman Bernanke said, the PCE index is generally thought to be "the single most comprehensive and theoretically compelling measure of consumer prices." At the same time, Bernanke said that "no single measure of inflation is perfect, and the Committee will continue to monitor a range of measures when forming its view about infl...