CHART OF THE DAY: Burying Godot!

Out of curiosity last night I went back to the Fed Minutes from roughly a year ago from the FOMC Meeting September on 15^th and 16^th in 2020.  At that point, the consensus view of Fed members based on outputs from their models (so 18 different projections) was:

• The vast majority believed Headline PCE for 2021 would be in the range of 1.5 → 1.8%; and
• The vast majority believed that the risks to PCE were weighted to the downside.

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.