The Inflation Perfectionists
Notes on the Week Ahead
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PCE Inflation and the Fed's Strategy to Avoid the Pandemic
The Federal Reserve does not regard CPI as its primary inflation target. It is trying to achieve 2% inflation as measured by the annual change of the price index for personal consumption expenditures, most commonly known as the PCE deflator. We expect year over year CPI inflation to drift down to 2.8% by December 2023 and 2.0% by December 2024.
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