Afternoon Must-Read: Cardiff Garcia: The Fed’s Converging Misses on Inflation and Unemployment

Cardiff Garcia: The Fed’s converging misses on inflation and unemployment: “The unemployment rate… has been falling quickly towards the Fed’s central tendency forecast of 5.2-5.8 per cent for the long-term rate….

Inflation (1.1 and 0.9 per cent respectively) [has] remained well below the Fed’s explicit 2 per cent target–as they have for nearly two years…. If… current trends hold, the extent of the Fed’s miss on inflation will start to converge with its miss on its full-employment mandate. To increasingly emphasise the former as a signal that policy will remain loose… wouldn’t be too difficult to justify.