This paper investigates core inflation defined as the best predictor of US inflation. I compare forecasts obtained … using the weighted median consumer price index inflation rate, a trimmed mean consumer price index inflation rate, the … consumer price index inflation rate and the consumer price index less food and energy inflation rate. The latter two often have …

Policymakers tend to focus on core inflation measures because they are thought to be better predictors of total … inflation over time horizons of import to policymakers. The authors find little support for this assumption. While some measures … of core inflation are less volatile than total inflation, core inflation is not necessarily the best predictor of total …

Two rationales offered for policymakers' focus on core measures of inflation as a guide to underlying inflation are … that core inflation omits food and energy prices, which are thought to be more volatile than other components, and that … core inflation is thought to be a better predictor of total inflation over time horizons of import to policymakers. The …