[ConstantineX]

Borodog,

In his Senate and House speech, I think Bernanke kept on emphasizing that the Fed does pay attention to headline inflation. The reason they focus on core inflation, the argument goes, is that that's the only type of inflation they feel they Federal Reserve has the power to control. If food and energy are volatile in a short time range, then monetary policy can't do anyting to fix them - and they could stem from supply shocks (which we can't really control) rather than increased demand (which we sorta can).