Mother Jones
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Earlier today I noted that core PCE inflation—the measure used by the Fed—has been rising very, very slowly over the past two years. “At that rate, it should hit 2 percent by about 2019 or so,” I snarked.
But that got me curious. How fast is core PCE rising? So naturally I put it into a chart:
It turns out that by 2019 it would actually hit 2.2 percent at its current rate. This is still not something we should be very worried about.1
Of course, inflation isn’t just a trend independent of everything else. If the Fed changes interest rates, or President Trump balloons the deficit, or the dollar weakens and imports get a lot more expensive, then that will affect the inflation rate. But none of those things have happened yet, and until they do we still don’t really have anything to be worried about.
1In fact, it would probably be helpful to see inflation rise to 3 percent for a year or two. If it rises above that, then it’s might be time for the Fed to act.
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