How far inflation has fallen since its peak — and how much further it has to go
by Zachary Halaschak, Economics Reporter |
April 30, 2023 04:00 AM
Another week has gone by, and another inflation report has shown prices are continuing to fall from the year before. But how much has inflation slowed, and when will it be back to normal?
The Federal Reserve has been raising its interest rate target in an effort to slow demand for goods and services and bring down inflation. On Friday, the Bureau of Economic Analysis released the March numbers for the Fed’s preferred inflation gauge, the personal consumption expenditures index, which showed inflation on an annual basis slowing from 5.1% in February to 4.2% in March.
Inflation: Headed back down?
What is considered healthy in terms of inflation?
The Fed has what is known as a dual mandate. Basically, its two main priorities are full employment and price stability. Full employment just means keeping as many workers in the labor market as possible and the unemployment rate low, and price stability just means keeping inflation at a healthy level. For the Fed, the level that is considered healthy is 2% — so annual inflation in the most recent PCE report shows price growth is almost double than what officials are aiming for.
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https://www.washingtonexaminer.com/policy/economy/how-far-inflation-fallen-peak-much-further
