The argument always leads in circles doesn't it? What was that theory from 1940s computer science? "You can't solve a problem using the same tools used to define it."? Or something like that. So let's back up to the definitional problems.

Government and the Fed have done an excellent job of making "inflation" a synonym for "rising prices" and further, that "inflation" is a synonym for a rising CPI.

But, as stated above, the true definition of inflation is "an increase in the money supply that results in rising prices". Of course price rises can occur for many reasons (such as supply/demand imbalances), but in the public's mind all price rises are simply termed "inflation".

This obfuscation of cause and effect allows the Fed to more easily control inflation perceptions. They can now show that inflation is contained by manipulating the metrics such as CPI or mis-directing the cause of "inflation" to "greedy oil companies". The effect has now become the cause.

This is done to hide the true cause of inflation: The Fed and government are continually spending new money into the supply. Targeted at a benign 2% so we don't start asking too many questions.

jk is absolutely correct. In our banking system a flat money supply growth has the effect of deflation. This system requires constant money supply expansion to keep afloat. Even a temporary pause in the expansion can have devastating effects.

So it's obvious the Fed's statements are for public consumption and have nothing to do with their true goals. They are managing perception. They are acting with a separate intention. Once that is understood, analysis becomes much simpler.