bloomberg.com/news/articles/…
He would be comfortable with inflation around 2.25% or 2.375%. The policy, known as average inflation targeting, would be a shift from the Fed’s current way of keeping prices stable, in which it targets 2% regardless of what happened in the past.
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He would be comfortable with inflation around 2.25% or 2.375%. The policy, known as average inflation targeting, would be a shift from the Fed’s current way of keeping prices stable, in which it targets 2% regardless of what happened in the past.
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What Avg?
Below uses YoY chg in core PCE (orange) and the 6-mo Avg of this chg (yellow).
Kaplan's target has only been reached one time in the last 25 yrs, 06/07.
What would the reaction to Kaplan's comments if it was spun as "Fed ok with a 25-year high in inflation"?
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Below uses YoY chg in core PCE (orange) and the 6-mo Avg of this chg (yellow).
Kaplan's target has only been reached one time in the last 25 yrs, 06/07.
What would the reaction to Kaplan's comments if it was spun as "Fed ok with a 25-year high in inflation"?
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To be fair, the Fed says they target headline. I would argue they really mean core.
The difference is largely gas prices.
Why core? Every time headline inflation surges because of gas prices, they call it a "tax" on the economy and back away from hiking rates.
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The difference is largely gas prices.
Why core? Every time headline inflation surges because of gas prices, they call it a "tax" on the economy and back away from hiking rates.
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My bet is if the 25-year high in core inflation was indeed reached, even though it is only 2.375%, a technical reaction would occur in the bond market ...
It would shit its pants.
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It would shit its pants.
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