Inflation becomes again normal

Publié le par Jean-Pierre Chevallier

Inflation becomes again normal in the United States: the PCE-PILFE returned in the standards, well installed under the bar of 2%.
Graph 1:

The PCE-PILFE of August increased by 1.76% year-on-year, against 1.91% in June and July.
The trend is good.
Core inflation must imperatively remain in the band from 1 to 2% without reaching these limits, which was carried out from 1996 to 2003 thanks to the monetary policy followed by the Fed.
Graph 2:

The inflationary skid which lasted since 2004 is stopped thanks to the maintenance of the rates of the Fed above the neutrality at 4.25%… what causes a deceleration of the growth which is likely to go until a recession.
It is in these conditions that inflation can be controlled.
Inflation should not go down under the floor from 1% because the risks of deflation would be important. It is what occurs to Japan for some years.
PCE-PILFE: Personal Consumption Expenditures: Chain-type Price Index Less Food and Energy.

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