MNI BRIEF: Fed Sees Trimmed Mean Inflation At 2.4% Next Year

Trimmed Mean PCE inflation, a favored internal measure of underlying inflation for Federal Reserve officials, is likely to rise to 2.4% by the end of next year as price pressures stemming from supply bottlenecks broaden out, the Dallas Fed said in a blog post Thursday.

At the same time, labor market slack will not restrain inflationary pressures as it did in the aftermath of the Great Recession, four Dallas Fed economists said, citing evidence of a tight labor market and strong wage growth.

MNI has reported that simmering price pressures could force the Fed to speed up its QE exit and interest-rate liftoff timeline.