Core CPI is around 1.7% in the US right now. Energy is affecting the non-core value (currently at 0% or slightly negative). The non-core value is typically very volatile.
The Fed has a target of 2% inflation. Krugman makes good arguments that the target should be 4%.
Meanwhile the Fed is talking about raising interest rates later this year (which is deflationary).
There are two clearly different views forming and it will be interesting to see how it plays out.
Canada has a target 'between 1 and 3%' and our core is currently sitting at 2.1%. We just had a interest rate decrease.
Some recent comments from Krugman about why we didn't see deflation during the recent recession:
The Fed has a target of 2% inflation. Krugman makes good arguments that the target should be 4%.
Meanwhile the Fed is talking about raising interest rates later this year (which is deflationary).
There are two clearly different views forming and it will be interesting to see how it plays out.
Canada has a target 'between 1 and 3%' and our core is currently sitting at 2.1%. We just had a interest rate decrease.
Some recent comments from Krugman about why we didn't see deflation during the recent recession:
http://krugman.blogs.nytimes.com/2015/03/31/missing-deflatio...