"Core inflation has a historical 94% correlation with headline and the historical chart shows vividly that
headline follows core, not the other way around. Second, the assertion
that the Fed only watched core inflation in the 1970s as opposed to
headline simply isn't the case - the Fed ignored both. For 90% of that
inflation cycle, core and headline were moving in tandem - there was
never the sustained gap between the two as has been the case through
this entire 7-year cycle which saw headline inflation peak at 4.7%
(back in Sept/05!) and core peak at 2.9%."