On Friday, Chicago Federal Reserve President Austan Goolsbee said strong consumer price index readings were alarming but focused on the Fed's targeted personal consumption price expenditures index.
"We've seen multiple inflation numbers that were higher than we desired" for the CPI, Goolsbee said Fox Business, but PCE "is the superior indicator...Better figures showing inflation falling will make us feel better about where we are.Prices will stabilize as PCE rises."
"One month is no months," Goolsbee added, illustrating Fed members' reluctance to overemphasize one unfavorable data point.
However, the higher-than-expected CPI readings in January, February, and March represent "real months" of poor data that the Fed must analyze to determine if inflation has paused or will continue to fall.
The PCE price index, which is based on the same consumption data as gross domestic product, weights housing and healthcare costs differently than the CPI, which is based on a survey of consumer spending on a defined basket of goods and services. The central bank uses it to set its 2% inflation target.
PCE inflation tends to be lower than the CPI, and analysts this week said it could decline somewhat for the month when the next wave of data is revealed on April 26.
After a week in which investors used persistent inflation to delay rate cuts, Goolsbee did not discuss his policy views or anticipate what the Fed may do in future meetings.
Wall Street's main indexes fell on Friday, following a week of higher-than-expected inflation and jobs data that shifted investors' interest rate decrease expectations.
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