Core PCE inflation over the last 3 months was a 4.4% annual rate. That is higher than any time from Nov 1990 to Mar 2021. Yes, there were special factors, seasonal issues, etc. But there were also special factors & seasonal issues at various times in those previous 30 years.
@jasonfurman I mean, what can be done to bring it down though? Government spending is down.. would more hikes help?
@jasonfurman Hi Jason - how does that annualised number tie out to the 3.7% Q1 annualised we received yesterday. Are they different data sets?
@jasonfurman At this point, the Fed's only realistic option is to unwind the easing talk and sit tight at 5.25/5.50, and hope that term premia rise with Tsy issuance.
@jasonfurman Inflation has proven to be "not transitory."
@jasonfurman At no point during that period were we in the aftermath of a 25% overnight pop in M2, the result of a $6t helicopter drop. That's the "special factor" driving still-high rent inflation in CPI (tho not on the ground) and auto insurance prices which continue to adjust.
@jasonfurman @tomkeene Pandemic was unusual though. It synchronized so much of the globe's economic activity. I would think this would be toughest seasonal adjustment since WWII
@jasonfurman Big government spending programs likely won’t help to bring this down anytime soon.