Inflation & deflation

Inflation is the unit of account losing purchasing power against a basket. Deflation is the same arrow reversed — and historically more dangerous, because debt burdens grow against falling nominal income.

Two honest economists can disagree about whether inflation is happening because they're disagreeing about the basket. The math isn't the argument; the choice of weights is.

Headline CPI

3.0%

Core CPI

3.4%

Core PCE

2.6%

Trimmed mean PCE

2.7%