Inflation Probably Won’t Be a Problem Until 2019

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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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This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

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