PCE Inflation: Instantaneous below Target

Year-on-Year PCE inflation (3.2% in November) is a standard; here’s instantaneous headline and core for comparison (and trimmed mean y/y through October):

Figure 1: Core PCE inflation, y/y (bold black), instantaneous (T=12,a=4) headline PCE inflation (light blue), instantaneous core PCE (red), both per Eeckhout (2023), trimmed mean y/y (light green), all at annual rates. Source: BEA via FRED, Dallas Fed, and author’s calculations. 

As others have noted, PCE and core PCE are at 2% and 1.9% 6 month annualized inflation are at or below target 2%. As Figure 1 shows, Instantaneous measures which upweights recent m/m inflation and downweights older inflation is below 2%.




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