Below is a chart and brief excerpt from today's Early Look written by Director of Research.
Out of curiosity last night I went back to the Fed Minutes from roughly a year ago from the FOMC Meeting September on 15th and 16th in 2020. At that point, the consensus view of Fed members based on outputs from their models (so 18 different projections) was:
As Paul Harvey used to say, "we know the rest of the story."
On the PCE front, the last report for Headline PCE in August came in at +4.3% Y/Y, which was more than 150% larger than the Fed’s estimates from less than a year prior. Even the Core reading at +3.6% Y/Y, was more than double their projections. To the Fed’s credit, at least now they are admitting that inflation is here, even if it may be transitory.