Is the Fed Looking at FAIT? If so, What Would It Imply?

A reader takes issue with my post showing y/y and instantaneous core PCE deflator versus 2% target, noting (correctly) that as of 2020, the Fed’s new monetary strategy incorporates Flexible Average Inflation Targetting (FAIT). While I might have missed it, I don’t recall how one should operationalize FAIT in terms of graphs and rates of reversion to trend lines. The reader gives no guidance, merely a criticism, so I will update what I’ve posted before.

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