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The Fed's 2% comfort zone refers to the core PCE Deflator, not the core CPI.

Paul Hickey

Good Point Steve. We used the CPI reading as more readers are generally familiar with the CPI over the PCE. Looking at the core PCE shows that since 1960, the y/y reading has been below 2% for a total of nearly 11 years (under 25% of the time). So even here, the so-called comfort zone is pretty uncommon.


Amit Amin

An old article, but still very useful. Using CPI here is also helpful in comparing to inflation expectations, which, for TIPS and Mich, use CPI and not PCE.

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