Powell: Don't overinterpret the CPI data

ChainCatcher news, Federal Reserve Chairman Powell warned on Wednesday not to overinterpret the data showing the largest month-on-month increase in the Consumer Price Index (CPI) in over a year, while also acknowledging that the readings were significantly higher than expected.

During a hearing before the House Financial Services Committee, Powell stated, "The CPI readings are almost above all forecasts, but I want to remind you of two points. First, we will not get excited over one or two good readings, nor will we get excited over one or two bad readings. Second, our inflation target focuses on the Personal Consumption Expenditures (PCE) price index because we believe it is a better measure of inflation. Therefore, you need to understand the conversion from CPI to PCE, and tomorrow we will get more relevant data from the Producer Price Index (PPI). Later tomorrow, we will know how the PCE readings look."