Core CPI Continues To Run Above Fed's Target

Core CPI is running well above target. I am not in favor of the Fed targeting a CPI level, which is currently 2%. If the Fed wishes to pick a target, don’t disclose it. Disclosure only raises questions and puts the Fed on the back foot.

While we are on the topic, why is 2% CPI the Fed’s target? A 2% CPI target by definition means the Dollar’s purchasing power will erode each year. Why not target 0% inflation? In a productive economy with low tax rates and low national debt, prices come down as productivity increases.

• September Core CPI (Headline CPI less Food and Energy), was 3.3% Y-O-Y, well above the Fed’s arbitrary 2% target (see Core CPI chart below). Core CPI was 0.3% month-to-month for the second consecutive month.

• Powell is caught between a rock and a hard place and won’t see 2025 as Fed Chairman.