Too-low inflation target predictably leads to under-shooting: Difference between core price level and level that would have prevailed had the Fed’s 2 percent target been met, 2006—2016
| Quarter | Core PCE, actual | Core PCE, at 2% growth |
|---|---|---|
| 2006Q1 | 100 | 100 |
| 2006Q2 | 100.7018 | 100.4963 |
| 2006Q3 | 101.2705 | 100.995 |
| 2006Q4 | 101.6557 | 101.4963 |
| 2007Q1 | 102.2845 | 102 |
| 2007Q2 | 102.6697 | 102.5062 |
| 2007Q3 | 103.0828 | 103.015 |
| 2007Q4 | 103.8275 | 103.5262 |
| 2008Q1 | 104.48 | 104.04 |
| 2008Q2 | 104.9886 | 104.5563 |
| 2008Q3 | 105.6528 | 105.0752 |
| 2008Q4 | 106.0648 | 105.5967 |
| 2009Q1 | 106.5949 | 106.1208 |
| 2009Q2 | 107.2001 | 106.6475 |
| 2009Q3 | 107.5006 | 107.1768 |
| 2009Q4 | 107.9223 | 107.7087 |
| 2010Q1 | 108.1111 | 108.2432 |
| 2010Q2 | 108.3311 | 108.7804 |
| 2010Q3 | 108.5586 | 109.3203 |
| 2010Q4 | 108.711 | 109.8628 |
| 2011Q1 | 109.0715 | 110.4081 |
| 2011Q2 | 109.711 | 110.956 |
| 2011Q3 | 110.2765 | 111.5067 |
| 2011Q4 | 110.7229 | 112.0601 |
| 2012Q1 | 111.3024 | 112.6162 |
| 2012Q2 | 111.7831 | 113.1751 |
| 2012Q3 | 112.1093 | 113.7368 |
| 2012Q4 | 112.4215 | 114.3013 |
| 2013Q1 | 112.8529 | 114.8686 |
| 2013Q2 | 112.9999 | 115.4387 |
| 2013Q3 | 113.3583 | 116.0116 |
| 2013Q4 | 113.706 | 116.5873 |
| 2014Q1 | 114.0418 | 117.1659 |
| 2014Q2 | 114.4807 | 117.7474 |
| 2014Q3 | 114.8305 | 118.3318 |
| 2014Q4 | 115.0505 | 118.9191 |
| 2015Q1 | 115.2608 | 119.5093 |
| 2015Q2 | 115.7179 | 120.1024 |
| 2015Q3 | 116.0366 | 120.6984 |
| 2015Q4 | 116.3564 | 121.2975 |
| 2016Q1 | 116.8661 | 121.8994 |
| 2016Q2 | 117.3221 | 122.5044 |
| 2016Q3 | 117.7878 | 123.1124 |
| 2016Q4 | 118.158 | 123.7234 |
| 2017Q1 | 118.7289 | 124.3374 |
Notes: Core personal consumption expenditures (CPE) are from Table 2.4 from BEA NIPA. Counterfactual line simply assumes core prices rose at 2 percent annual rate from the first quarter of 2006 onward.
Source: Author's analysis of Bureau of Economic Analysis(BEA) National Income and Product Accounts (NIPA) data series