Subject: Re: Powell Comments Today
Alan Bindner *(Economist at Princeton) has a response:

Some­what? In truth, the first and sec­ond halves of 2022 were like two dif­fer­ent worlds in terms of in­fla­tion. The most stun­ning ex­am­ple is the be­hav­ior of the over­all con­sumer price in­dex. While this mea­sure of in­fla­tion isn't the Fed's fa­vorite (more on that shortly), it gets vastly more pub­lic at­ten­tion than any other mea­sure. The CPI rose at an 11.1% an­nual rate in the first half of 2022 and a 1.9% an­nual rate in the sec­ond half. No, that is not a typo'a tad un­der 2%.

One pos­si­ble rea­son may be that the Fed's 2% in­fla­tion tar­get ap­plies not to the CPI but to the de­fla­tor for per­sonal con­sump­tion ex­pen­di-tures'a wonk­ish point, but it's true. How­ever, PCE in­fla­tion also crum-bled'from 8% in the first half of 2022 to 2.1% in the sec­ond. That's 'only' a 6-point drop, less than the 9-point drop in CPI in­fla-tion, but still re­mark­able. The FOMC calls that 'eas­ing some­what?'
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