Recent research has emphasized that the Federal Reserve under Chairman Alan Greenspan was forward looking, smoothed interest rates, and focused on core inflation. The semiannual monetary policy reports to U.S. Congress indicate that the measure of inflation used in monetary policy deliberations...

This article investigates empirically short-term dynamics between headline and core measures of consumer price index and personal consumption expenditure inflation over three sample periods: 1959:1–1979:1, 1979:2–2001:2, and 1985:1–2007:2. Headline and core inflation measures are...