The Fed’s flawed PCE inflation targeting regime

Inflation rate

The US Federal Reserve Board, following much deliberation, announced an explicit longer-run goal for inflation on January 25, bringing it belatedly into the fold of central bank inflation targeters. The vast majority of central banks now follow explicit inflation targets, with the European Central Bank, which follows an implicit target, still a notable exception.

The new target at the Fed is defined as 2% annual change in the price index for personal consumption expenditures (PCE) as opposed to

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here:

You are currently unable to copy this content. Please contact [email protected] to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

If you already have an account, please sign in here.

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: