Core inflation (chart 1) registered a year-over-year growth rate of 2.1% in the BLS report released today.
The reported rate of inflation is slightly above the Federal Reserve’s 2% target for core CPI growth. The Fed has recently hinted that it may begin another round of monetary stimulus. But with inflation above the Fed’s target, and capacity utilization nearing 80% (chart 2), the wisdom of new monetary stimulus must be questioned.
