The Fed’s Targeting Inflation at 1%; It Just Doesn’t Know It Yet

It’s odd, but the best way to forecast price inflation is to look at wage inflation. In the years leading up to the Lehman crisis wage inflation ran about 3.4% and price inflation (PCE core) ran around 2.4%. The gap reflects productivity (and changes in the share of national income going to labor.) Headline inflation [...] View the full post at: The Fed’s Targeting Inflation at 1%; It Just Doesn’t Know It Yet Related posts: Global Inflation Creeping Higher TIPS Derived Expected Inflation Economic Data: CPI Higher than Expected