- The Personal Consumption Expenditures Price Index, which is the Fed’s preferred measure of inflation, grew at a continuously compounding annual rate of 5.6 percent from December 2020 to December 2021.
- The Fed is officially committed to a 2 percent average inflation target. But supply constraints and a surge in nominal spending have pushed prices well above target. Inflation has averaged 3.5 percent since January 2020, just prior to the pandemic.
- Bond markets were pricing in nearly 3 percent PCEPI inflation per year over the next five years and 2.6 percent per year over the next ten years. Now, they are pricing in around 2.6 percent inflation per year over the next five years and 2.2 percent per year over the next ten years.
For further details see:
Inflation Is High, Will Remain Elevated For Years