alt Hacker NewsI would asume the FRED statistic already is inflation adjusted as they said real income (usally inflation adjusted). That is 25% come ontop of the inflation, while you subtract it.
That being said, inflation or CPI is a very poor metric over time. I mean, sure, lets look what a smartphone with an all-knowing AI and internet access cost 100 years ago and see how much more we are paying now for it. Or the price of antibiotics, polio vacines and so on - sure they were cheap 100 years ago.
Because it is obvisouly not possible, we measure CPI in the price of eggs, milk, veggies, transportation and so on. Sure, we are all happy that we can buy today 25% more butter than we could 20 years ago.
As you suggest, if anything, inflation statistics overstate the decline in currency value over time.
Over the long term, attempting to quantitatively adjust for the value of goods that simply did not exist prior to time X becomes a subjective game.
What’s the value of $10 worth of penicillin or $10 worth of LLM tokens relative to their “substitutes” in an era before they were invented?