From Dylan Matthews at Vox: How I (and US policymakers) got inflation wrong
So I wrote a long piece last summer arguing that high inflation was unlikely in the 2020s. When fears arose last fall that rising inflation expectations — that is, people thinking inflation was going to be higher in the future — could in turn lead to more inflation now, I wrote a newsletter citing research that cast doubt on that theory. This January 1, I predicted that average US inflation for the year would be below 3 percent.
Well, in February, core inflation as measured by the personal consumption expenditures (PCE) index grew by 5.4 percent, and seems to still be heating up. That’s my preferred metric, but data released on April 12 showed that the more widely publicized consumer price index grew by 8.5 percent compared to the year before, the highest rate in four decades.