ORLANDO, Fla., June 30 (Reuters) – It may just boil down to semantics, and in good times when inflation is low it’s not an issue at all. But the Fed has a communication problem.
Inflation’s surge to the highest level in 40 years has shone a light on what exactly the Federal Reserve’s inflation goal is, how policymakers go about achieving it, and how they get their message across to the public and financial markets.
Figures on Thursday showed that U.S. inflation, as measured by the annual rate of increase in the personal consumption expenditures (PCE) index, held steady in May at 6.3%. Excluding food and energy prices, the ‘core’ PCE rate of inflation fell to 4.7%.
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The headline rate of PCE inflation, including food and energy prices, is now 1.6 percentage points higher than core, which strips out these more volatile inputs.
That’s the widest spread in 11 years, a result of soaring energy, food and…