Alternative inflation measure firm Truflation continues to challenge the establishment belief that inflation is too high.
The US Federal Reserve decided to hold interest rates steady at a meeting last week, with the main reason being that the economy was chugging along, and inflation remains stubbornly high.
Truflation, an independent firm that provides daily updates on inflation and other economic indicators, was founded to create a “new standard of transparency and trust in financial information.”
Investors include well-known names such as Coinbase, Chainlink, iAngels, and others. The platform was founded in 2021 by former Bitcoin.com CEO Stefan Rust.
Truflation’s most recent inflation reading indicates a significant decline, from 1.24% to 0.86%, the lowest since 2020.
Meanwhile, the US Federal Reserve, which reviews a wide range of data points, including the government’s accepted inflation measure, estimates the inflation rate at 2.7%. The Federal Reserve aims to keep inflation at 2%.
If Truflation’s report is more accurate than the Fed’s, the US economy is at risk of entering deflation.
The US Federal Reserve states that it reviews a broad range of data points, including those outside the government-derived statistics. It is unclear whether Truflation’s data is among the indicators that the Federal Reserve staff reviews.
As Kevin Warsh has been selected to replace current Federal Reserve Chair Jerome Powell this Spring, there could be a shift in policy, as Warsh believes rates should be lower. Meanwhile, there are two additional meetings with Powell presiding, so the Fed could resume rate cuts, depending on the data.