If you've heard that "real" inflation is under 1 percent and the Federal Reserve is wildly overreacting, you can thank a little-known website called Truflation. Pundits are pouncing on its numbers to claim prices are up barely a third of what the official Consumer Price Index (CPI) shows.
Truflation even says prices declined by nearly 1 percent since mid-September—a drop CPI indicates only occurred twice since World War II. Unfortunately, Truflation gets three things dangerously wrong: what inflation statistics measure, housing costs, and neutrality.
Inflation statistics are supposed to measure persistent changes in the cost of living, not chase every wiggle in online checkout prices. Truflation says it scrapes tens of millions of prices every day from online sources—a firehose run through proprietary filters that outsiders cannot inspect or replicate. CPI, built from roughly 80,000 carefully sampled prices collected on a schedule, deliberately smooths this noise to uncover the underlying trend. Gas prices, airfares, and Amazon gadgets whip around constantly; treating every blip as meaningful causes the Truflation gauge to erratically oscillate. The BLS publishes every formula, weight, and revision rule. Truflation offers a glossy methodology PDF while its code and microdata remain shrouded. No statute, inspector general, or independent advisory committee stands between the public, Truflation's investors, and Truflation's index.
Shelter is the single largest expense for most households at roughly one-third of CPI. The implicit "owners' equivalent rent" moves slowly because it reflects the overall change in costs from all occupied units, the vast majority of which are continuing leases. Once a family signs a lease or locks in a fixed-rate mortgage, they experience that cost for an extended period. That slow-moving quality is a feature, not a bug. CPI shelter data tracks the overall costs of housing. Truflation’s approach focuses on current listings seeking new tenants. This ignores the reality that only a small portion of families enter a new lease or mortgage in any given month. Truflation's own analysis shows its housing index peaked in mid-2022 and fell while CPI shelter kept rising. Truflation presents this as proof BLS is "nine months behind" reality, ignoring the fact that ongoing leases or mortgage payments were not suddenly slashed.
Some claim Truflation is an independent check on "government numbers." But independence from government is not the same as independence from incentives. It is a so-called "inflation oracle" created to serve crypto-world DeFi and Web3 applications, funded from the start by crypto-focused investors. In February 2024 it raised $6 million led by Laser Digital (Nomura's digital-asset arm) and Red Beard Ventures, with backing from Coinbase Ventures' Base Ecosystem Fund and others. Crypto investors make more money when speculative assets rally. In 2021–2022, when crypto was sold as an inflation hedge, Truflation ran hotter than CPI. Today, desperate for rate cuts, it reports inflation below 1 percent while CPI sits around 2.7 percent.
Truflation is not a rules-bound benchmark. It’s more akin to a blackbox. The company explains that weights are revised annually using proprietary data, and that these changes can alter "the trending of the Truflation indexes." Every year, Truflation reserves the right to move the goalposts and then insists the new goal line is "reality." A 2026 internal update made the malleability plain: a single housing model change boosted measured housing inflation 1.56 percentage points year-over-year.
One "populist" economist uses Truflation's low readings to argue President Trump is "spot on" and the Fed should stop fighting inflation, as if a venture-funded website were the real scoreboard and decades of official data were the problem.
Outsourcing monetary policy to a black-box indicator backed by crypto VCs does not pass the economics smell test. If the Fed underestimates inflation, another round of easy money could trigger the very second wave of inflation Americans are desperate to avoid. Journalists and commentators have a special responsibility when a proprietary index diverges sharply from the official statistics underlying benefit formulas and inflation-linked bonds. They should ask hard questions about methodology, incentives, and replicability rather than declare the old measures obsolete.
None of this means CPI is perfect or beyond criticism. Reasonable people debate how it handles quality changes and owner-occupied housing. But if you want to know whether inflation has truly slipped below 1 percent, you are far better off looking at your lease, vehicle and health insurance premiums, grocery receipts, and heating bills than at a crypto-funded index built on volatile listings and proprietary weights. Measuring inflation is a public trust better served by transparent, accountable statistics than by a black box whose sponsors profit when the story it tells lines up with their crypto holdings.
