ACTV - Supercore Inflation Is Worth Watching But It Is Probably Not A Good Policy Target
2023-03-19 01:57:00 ET
Summary
- Although headline inflation continues to fall and unemployment is near a 50-year low, the Federal Reserve still faces some tricky policy decisions over the next few months.
- The impression that the Fed is targeting supercore inflation was reinforced by a press conference held on February 1 by Chairman Jerome Powell.
- On the whole, I am enthusiastic about the Fed’s incipient moves away from old-style Phillips curve models that lump all prices together as a single variable, whether that is the CPI, the PCE, or something else.
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Supercore Inflation Is Worth Watching, But It Is Probably Not A Good Policy Target