Low Inflation continues…

Low inflation has been a thorn in the Fed’s side throughout this expansion, and it’s a big part of the reason that the central bank has cut back its rate-hiking plans for the cycle.

Fed officials say they target 2 percent inflation symmetrically — meaning they’re equally unhappy about overshoots and undershoots — but they’ve been on the low side since they formally adopted that target back in 2012. The Fed isn’t alone: from Japan to Europe, central banks are struggling to meet their inflation goals.

Inflation is still low 10 years into the current economic expansion

Despite that, the tepid progress has come as a surprise to U.S. policy makers, who believed America’s hot labor market would push price indexes higher, faster. Officials had expected inflation to climb to 2.1 percent in 2020 and 2021 — until Wednesday. They no longer expect to overshoot their 2 percent goal at all, their newest economic projections show.

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