Inflation Refuses to Fade

However much those pressing the Fed might wish otherwise, inflation still shows no signs of hitting the central bank’s 2 percent target.

December CPI (consumer price inflation) came in at 2.7 percent, slightly higher than expectations, with housing, groceries, and higher energy costs doing their bit to keep the number up. The data was still affected by distortions created by the shutdown. The better news is that the overall picture does not suggest any acceleration of inflation. The effect of tariffs has been less than expected, but that may partly reflect the herky-jerky nature of their implementation, and a willingness (so far) by companies to “eat” their costs. Core CPI (excluding food and energy) came in a little lower. Overall, the picture is one in which inflation is neither reaccelerating nor falling.

Then again,

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