Yahoo Finance: Fed's Barkin willing to raise rates if inflation doesn't fall soon

[progree]

4. Core inflation is stuck at near 5%, more than 2X the Fed target

Rolling 3 month averages thru May, latest 7 values (annualized)
CPI: . . . . 4.5% 3.3% 3.5% 4.1% 3.8% 3.2% 2.2%
Core CPI: 5.0% 4.3% 4.6% 5.2% 5.1% 5.1% 5.0%

It looks like the Core CPI has flatlined for several months. (The Fed uses the Core measures for projecting future inflation because energy prices (which are in the regular CPI but not the core CPI) swing so widely from month to month).

Yes, yes, the regular CPI looks nice right now, but it bounces up and down with energy prices. So it can turn into the hotter measure rather quickly when energy prices again bounce back upwards.

More: https://www.democraticunderground.com/10143087481#post2

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The core PCE is much the same picture as the core CPI --
https://www.democraticunderground.com/111695982

Core PCE - 3 month rolling average and 6 month rolling average



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Both core measures (core CPI and core PCE) look stubbornly stuck at more than double the Fed's 2% target. In case people who just look at the year-over-year (12 months) numbers are wondering why the Fed is being such a meanie. Actually, the Fed has been kind of soft at the last 4 meetings because of the banking situation.

Even at a "modest" 5% inflation rate, the purchasing power of the dollar is cut in half in just over 14 years, and into a quarter in just over 28. Wages have not been keeping up, which is typical of high inflation periods. And the purchasing power of nest eggs are being eviscerated.

Considered the most reliable gauge of wages and salaries:
https://www.democraticunderground.com/10143067288#post4

So real wages and salaries have finally turned up, slightly, in the last 2 quarters.

But the last reading is still 3.7% below the peak, and 3.4% below the Q1.2021 value.

The Fed has had a 2% inflation target for many decades. It's not some secret or something they suddenly came up with. So why some people are mad that they are actually striving towards that goal -- from where we are at now which is about 5% inflation (more than double that target) -- is completely and totally beyond me. And invoking all kinds of right-wing conspiracy theories about it. Sigh

If it was a Republican administration fighting inflation, and the Fed did just three milqeutoast quarter point interest raises and a pause over the past 6 months when inflation was more than double their long- long-anounced target, people would be screaming about how they were going easy on the repuke administraton and only going through the motions (the last more-than-quarter-point rate hike was December 14 )

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The next PCE report (thru May) will be released June 30.