The latest data for the Federal Reserve's preferred inflation measure, core PCE, shows inflation at 2.8%. Most reporting will note that inflation remains stubbornly above the Fed's 2% target, more than four years after its initial surge which peaked at 7% (9.1% for headline consumer price inflation). Less commonly discussed is whether it still makes sense for the Fed to adhere to a 2% target in an economy undergoing significant supply-side transformations. It has even been excluded from the Fed’s review of its monetary policy framework, scheduled to conclude in the next few weeks. Few seem willing to examine a question central to economic well-being — whether, by applying fundamental analysis to today’s rapidly changing economic landscape, the Fed would still conclude that 2% is the appropriate benchmark. #economy #inflation #federalreserve #markets