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Larry Kudlow, the former Reagan administration economist who also advised the presidential campaign of Republican Donald Trump, said the Federal Reserve under Chair Janet Yellen has used a flawed method of measuring inflation.

Yellen on Tuesday said the central bank is puzzled by the persistence of low inflation which may mean that the timing of changes to interest rates may need to be adjusted. She spoke in Cleveland at the annual conference of the National Association for Business Economics.

“My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective or even the fundamental forces driving inflation,” Yellen said in a 17-page speech.

The Fed adjusts the interest rates charged to its member banks in an effort to encourage or discourage lending, depending on the pace of price increases. Its broad goal is to encourage full employment and stable inflation, with annual price increases of 2 percent.

The Federal Open Market Committee has been raising rates gradually since December 2015, although it kept them on hold at this month’s meeting. The central bank plans to start cutting its $4.5 trillion balance sheet in October by not reinvesting in Treasury debt. The committee also lowered expectations for inflation.

The Fed has met its goal on employment, with the jobless rate near a 16-yer low of 4.4 percent, but has missed the inflation target. Inflation was near 2 percent earlier this year but slowed to an annual rate of 1.4 percent.

Kudlow said the focus on labor market indicators is misguided, and the Fed should consider the value of the dollar in relation to commodities and other currencies.

“Don’t watch labor markets. They do not reflect inflation. They are at best a lagging, lagging indicator,” Kudlow said in a panel discussion on the CNBC business news network. “In a 17-page speech, she doesn’t mention money supply once. She mentions the exchange rate of the dollar once, but says it’s transitory.”

While broad measures of inflation like the personal consumption expenditure price index (PCEPI) are tame, the cost of homes, college tuition, prescription drugs and cable TV have outpaced inflation in the past 20 years, according to Money magazine. Financial assets like stocks also have gotten more expensive in relation to company profitability, which has some investors worried about unstable bubbles.

“They do not understand the monetary causes, the exchange rate causes nor the need to look at forward-looking market indicators, such as commodities. … They don’t get that,” Kudlow said. “I don’t think they have the power to move the inflation rate one way or another.”

Kudlow said the Fed needs to look at commodity prices, as past central bank presidents such as Paul Volcker and Alan Greenspan used to do, in tracking inflation.

“One mention of the dollar, which I would regard as one of the premiere influences on inflation,” Kudlow said of Yellen’s speech. “No mention of commodities or commodity baskets, which I think are leading indicators.”

Kudlow is radio host of “The Larry Kudlow Show” and author of “JFK and the Reagan Revolution: A Secret History of American Prosperity,” written with Brian Domitrovic and published by Portfolio.

“More growth, more people working at better salaries and wages do not cause inflation,” Kudlow said. “What causes inflation? Excess money, which will be revealed in the foreign exchange and commodity markets and bond markets. That’s the model they should use.”

Kudlow doesn’t expect Yellen to be appointed to another term as Fed chair, but also said that’s his opinion and isn’t based on any inside information. He said President Trump wants a “reformer” heading up the central bank.