What the hell is JayPoo smoking? On the very day that the July PCE deflator release proves that inflation is surging, structural and very un-transitory, the dufus who runs America’s rogue central bank unloaded this observation during his virtual(ly worthless) Jackson Hole speech:
..…headline and core personal consumption expenditures inflation have run at 4.2 percent and 3.6 percent, respectively—well above our 2 percent longer-run objective.
Businesses and consumers widely report upward pressure on prices and wages. Inflation at these levels is, of course, a cause for concern. But that concern is tempered by a number of factors that suggest that these elevated readings are likely to prove temporary
The 12-month window we use in computing inflation now captures the rebound in prices but not the initial decline, temporarily elevating reported inflation. These effects, which are adding a few tenths to measured inflation, should wash out over time.
OK, we’ll see your 12 month window and raise you another 12 months. That is, we’ll get rid of last year’s swoon or “base effect” by going back two years to the comparable months in 2019 and see if the recent “elevated” inflation readings wash out.