Kevin Warsh runs the Fed now. Inflation's supposedly a crisis. Trimmed mean measures say it's at multi-year lows. Headline numbers say something else. Everyone's confused. Perfect.
Trimmed mean inflation strips out the highest and lowest price changes each month. Leaves you with the middle. The boring stuff. The stuff that doesn't make CNBC scream. Turns out when you remove the outliers, inflation looks tame. Almost like the emergency everyone's panicking about is just a few categories doing weird sh*t while everything else sits there like a dead fish.
Warsh faces pressure to act. From whom? Doesn't matter. Pressure's pressure. Could be Congress. Could be some guy on Twitter with 47 followers and a Pepe avatar. The Fed's supposed to do something. Raise rates. Lower rates. Hold rates. Sacrifice a goat. Whatever stops Karen from complaining about egg prices.
Here's the thing about trimmed mean measures. They're designed to show you what's actually happening beneath the noise. Which means they're completely useless for trading because markets don't trade on what's actually happening. Markets trade on what Jim Cramer said happened. Big difference.
Retail traders are currently Googling "what is trimmed mean" while their portfolios bleed out in three different currencies. They'll read one Investopedia article. Feel smart. Buy calls on some inflation-hedged ETF they can't pronounce. Then wonder why their account looks like it got trimmed by a f*cking lawnmower.
The headline number says panic. The trimmed mean says relax. Warsh has to pick which imaginary number to pretend matters more. Either way, some economist with a blue checkmark will call him an idiot. And your 401k will do whatever it was going to do anyway, because none of this sh*t matters and it never did.
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