Truflation, a real-time inflation tracker founded by former Bitcoin.com CEO Stepan Rust, just reported a sharp drop in consumer prices, with its index falling to 1.75%. This reading caught the attention of relevant figures in the crypto community as Truflation metrics went far below the Fed’s 2% inflation target.
The latest print showed a 0.52% decline since the end of June, signaling a significant short-term cooling of price pressures.
Truflation works by aggregating millions of data points from online retailers and service providers. It is generally considered a decent metric for an “up-to-date” snapshot of inflation trends.
So if inflation has gone below 2% according to this metric, does this mean that the Federal Reserve is guaranteed to slash interest rates at the next FOMC meeting scheduled for the end of the month? Well, not necessarily.
In fact, Truflation’s index dipped as low as 1.22% on April 6th, and that didn’t convince the Fed to cut rates. At the end of the day, Truflation it’s not considered a key benchmark for monetary policy decisions.
The reason for that is that, because it mostly tracks online price trends, Truflation has the ability to highlight price shifts in categories that can be underrepresented in the CPI basket. However, it is also far more volatile, leading to sharp swings that may not reflect broader, more stable economic patterns captured by official inflation measures.
The Federal Reserve primarily relies on lagging indicators like the Consumer Price Index and Core PCE (Personal Consumption Expenditure) as a more reliable tool. While those certainly provide a slower inflationary trend reading, they carry institutional weight that Truflation—despite its speed—doesn’t yet command in policymaking circles.
As of June, official CPI was still at 2.4%, and Core PCE was hovering around 2.1%–2.3%, meaning that inflation is still a concern in the eyes of the Federal Reserve.
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