Fed's new inflation metric criticized as 'useless' amid rising living costs and potential rate cuts.

Macro investor Otavio Costa criticizes the Federal Reserve's use of the St. Louis Fed's Trimmed-Mean PCE inflation rate, calling it a 'useless' metric that masks true inflation by excluding extreme price changes. This measure showed only a slight increase to 2.36% in March 2026, while actual commodity prices surged, indicating rising living costs. Costa argues this data manipulation reflects the Fed's loss of independence and pressures to justify lowering interest rates despite inflation risks. The debate highlights concerns over the Fed's credibility and the real economic impact on consumers as inflation expectations rise.