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?