New York CNN —The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures price index, measured 2.6% annually in November.
So, getting that number down to the Fed’s 2% target should happen in no time, right?
That’s because much of the run-up in inflation came from pandemic-induced supply chain disruptions and unusual spikes in demand.
The reason is that as inflation cools more, the remaining components that work to keep inflation above the Fed’s target are increasingly “sticky,” meaning they’re the least responsive to changes in market conditions.
And it’s so far, so good.”That said, though it’s not the Fed’s go-to inflation gauge, Thursday’s CPI report showed that the road to 2% could come with more bumps.
Persons:
”, John Cochrane, Jerome Powell, Gregory Daco, That’s, Powell, Cochrane, “, ” Paul Donovan, ” Powell, I’d, it’s
Organizations:
New, New York CNN, Hoover Institute, “, University of Chicago, CNN, UBS Global Wealth Management
Locations:
New York, EY