Core CPI YoY Falls Below Fed’s 2% Target To 1.9% (While Core PCE Growth Falls To 1.56%)

I doubt if anyone on The Fed’s Open Market Committee (FOMC) cares, but Core CPI YoY has been falling and is now below The Fed’s target inflation rate of 2.0%. Core CPI YoY is now 1.9% for April.

Let’s compare Cpre CPI YoY with Core Personal Comsumption Expenditures YoY. Core PCE growth is also below 2% and shows that same declining pattern of Core CPI growth.


The FOMC seems to more heavily weigh U-3 unemployment since a lack of slack is supposed to lead to wage inflation. Note that NAIRU is above U-3 unemployment by over 50 basis points.

Regardless, Chair Janet Yellen should start wearing a Nehru jacket and hat. Or it that a NAIRU jacket and hat?



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s