Inflation Slowing

[tjscott0]

The Great Inflation: Volcker Taught Us Many Lessons | St. Louis Fed

[Leap1]

The puzzle piece never talked about Volcker’s time in history is the fiscal responses. The fiscal responses are and have to be very different today. Meaning the FED’s approach is also equally different.

[mostlylong]

@tjscott0

In fact he said rate hikes would continue until inflation is down to the 2% level.

Well, Powell didn’t say this (as noted upthread) and it turns out Powell and friends did not do this.

[mostlylong]

@WendyBG

The Federal Reserve has said many times that it will not reduce the fed funds rate until inflation has declined to its target of 2% and stayed there for an extended period of time.

Same: Fed didn’t say this and didn’t do this. Instead they cut before the 2% target, which is what they said they would do.

PCE Inflation is around 2.x% last several months, so it is bouncing near target, but Fed team certainly wasn’t as hawkish as above statement. Instead, inflation was approaching target and they began cutting.