This past Wednesday Brian Cutsinger, a very sharp young financial economist from Angelo State University in Texas, was scheduled to give a lecture in San Jose. But on Monday, the host found out that Brian was sick and couldn’t make it. He contacted Jeff Hummel and I and asked if we could fill in. We said yes and Jeff and I hosted a phone discussion on Tuesday, where I covered the basics of inflation and then asked Jeff a series of questions that dug deeper. And deep into Federal Reserve monetary policy. I called it the “Hummel/Henderson Road Show on Inflation.” Jeff calls it “the Fed’s ever-expanding role and what it portends for the future.” It was going well.

One of the items I learned to prepare was a nice piece Forbes By Norbert Michel of the Cato Institute. He noted that inflation has come down month-on-month. So I went to the Bureau of Labor Statistics and sure enough, found the graph above. I presented it and said words to the effect of, “While I can’t predict inflation, I wouldn’t be surprised when the data comes out tomorrow. [that’s Thursday, November 10]They will show monthly increases in CPI that are around 0.4 percent or less.”

Guess what. The data came out yesterday Thursday and rose 0.4 percent. This means that the CPI (not seasonally adjusted) rose to 298.012 in October from 296.311 in June. This is an increase of 0.574 percent. On an annual basis, the inflation rate is 3 times, which is 1.72 percent. So the Fed achieved its inflation target. The seasonally adjusted CPI rose at an annualized rate of 2.80 percent in those 4 months, meaning the Fed nearly achieved its goal.

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