Whenever I write about core inflation, I hear from readers who think it's a ridiculous concept. After all, it excludes food and energy, which are big -- and sometimes volatile -- parts of many people's budgets.

Guess what, folks: An important Federal Reserve official agrees with you. James Bullard, president of the St. Louis Federal Reserve Bank, said in a speech last night that

It is time to drop the emphasis on core inflation as a meaningful way to interpret the inflation process in the U.S.

What's more, he uses the same common-sense argument that I often hear from readers:

One immediate benefit of dropping the emphasis on core inflation would be to reconnect the Fed with households and businesses who know price changes when they see them. With trips to the gas station and the grocery store being some of the most frequent shopping experiences for many Americans, it is hardly helpful for Fed credibility to appear to exclude all those prices from consideration in the formation of monetary policy.

The usual argument given for excluding food and energy is that they're too volatile, and that the Fed would whipsaw the economy if it responded to every change in oil prices. During the financial crisis, though, Bullard says the opposite was true:

During the second half of 2008 and into 2009, headline inflation measured from one year earlier fell dramatically and in fact moved into negative territory. This was a signal-one among many, to be sure - that a dramatic shock was impacting the U.S. economy. ... Yet the movements in core inflation during this chilling period were far more muted and sent much less of a signal that action was required.

Core inflation isn't really a good predictor of overall inflation, Bullard says, and the Fed shouldn't damage its credibility by talking about a flawed concept. His prescription: The Fed should stop talking about core inflation and instead set an easy-to-understand, numeric target for the headline number. The European Central Bank, among others, started setting such a target years ago.

Within the Fed, Bullard has been an influential thinker on quantitative easing and other issues. It will be interesting to see if his colleagues join him in rejecting the core-inflation concept.