"Average inflation targeting" update: The US is now well overshooting 2% average inflation (using the Fed's preferred measure, the PCE price index) since the pre-pandemic date of January 2020.
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Turns out AIT means it will average 2% over *some* periods. Who knew?!
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Those who have been paying attention knew. Again, the AIT asymmetric approach means the Fed wasn't going to respond to supply-side driven inflation shocks. Clarida and Powell were explicit about this. The FOMC statement also alludes to it.
Come on, David. I’ve been paying attention. It was not as clear as you suggest.
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I've been pointing this out for some time to you. The facts on the ground support it this understanding (i.e. AIT acting more like a NGDPLT). It should not be a surprise at this point.
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