One series of comments Warsh made while testifying to Congress back in April as a nominee has been getting more attention in recent weeks, following some high inflation reports. Essentially, Warsh signaled that he believed in focusing primarily on inflation data from core or even trimmed price indexes.

To understand what that means or why it matters, it's important to note that, originally, "inflation" was a term that simply meant the act of increasing, or inflating, the money supply. Once paper money—or, more accurately, paper claims to physical commodity money like gold—became widely adopted, it didn't take long for governments, bankers, and counterfeiters to realize that they could easily enrich themselves by creating and spending brand new paper claims to money. It also didn't take long for it to become obvious that printing a lot of new currency artificially raised the supply, making each unit of currency worth less than it had before—a phenomenon that most people experienced as a general rise in prices.

That artificial decline in the value, or purchasing power, of the currency was obviously not appreciated by the general public. It was a literal wealth transfer that benefited the small sliver of society who got the new money early at the expense of everyone else. So, over time, monetary authorities and their intellectual allies worked to obfuscate the concept.