Unmatched consistency

Even if he´s been consistently wrong!

Since July 2008, on the eve of the crash, Plosser has almost continuously ‘parroted’ the meme “sooner rather than later“. The latest edition, shortly before his retirement:

The U.S. economy has improved considerably and Federal Reserve officials should raise interest rates sooner rather than later in order to get ahead of future inflation, Philadelphia Fed President Charles Plosser said Wednesday.

Mr. Plosser, who retires in March and has been a frequent critic of the central bank’s unconventional policy response to the Great Recession, said the labor market continues to heal at a quicker pace than many economists had foreseen.

“I believe the economy has returned to a more normal footing, and as such, I believe that monetary policy should follow suit,” Mr. Plosser said in a speech to the Greater Philadelphia Chamber of Commerce.

Inflation has been running below the Fed’s 2% target over 2-1/2 years, and is expected to move lower in coming months because of plunging oil prices before picking up. But Mr. Plosser expressed confidence the energy price drag on U.S. inflation trends would be temporary.

Bur wait. In the three years to last summer, energy (oil) prices had been quite stable. Nevertheless inflation (both core and headline) trended down and now will go down further due to falling energy prices. What will take them up? Plosser´s ‘confidence’ is not enough!

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