(Late) Monday Smackdown: In Which I Am Annoyed at Being Paired with John Taylor

Must-Read: This time series since 2008 is not what would be produced by a central bank with a symmetric target of 2%/year for core PCE inflation:

Core PCED Inflation Through 2016Q4

I see nothing in the data to suggest that 2% will be reached if the Federal Reserve does not reverse its tightening cycle as ill-judged.

That is all.

Jared Bernstein: Inflation?! We ain’t got no stinkin’ inflation!: "The core PCE deflator rose at an annual rate of only 1.2 percent in 2016Q4...

...GDP’s on trend at about 2 percent, the job market is closing in, but not yet at, full employment (the underemployment rate is still about a percentage point too high), and wage growth has picked up a bit but it’s not bleeding into price growth in anything like an obvious or threatening way. And inflation remains below the Fed’s 2 percent target and could even be slowing.... The evidence in favor of a Fed rate hike in March looks really very, very weak.

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