Make it short, Why would you exclude food from the CPI basket when calculating core inflation?

Answer 1

Food is excluded from the Consumer Price Index (CPI) basket when calculating core inflation because food prices tend to be more volatile and subject to temporary fluctuations due to factors such as weather conditions, crop yields, and supply chain disruptions. Excluding food helps to provide a more stable and reliable measure of underlying inflation trends, allowing policymakers and economists to better assess the long-term price changes in other goods and services and make effective monetary and fiscal policy decisions.