Where’s that inflation we were promised? That’s the question Sens. Elizabeth Warren and Sherrod Brown asked economist Marvin Goodfriend during contentious hearings over his nomination to the Federal Reserve Board.
In 2011, Goodfriend had said that inflation would grow more severe. But inflation, as the senators noted, has been relatively low since then.
The Fed says it wants a measure of inflation called the PCE deflator to rise by 2 percent a year. Since the economic recovery began, the measure has almost always been below that target.
While Goodfriend was particularly vocal, he’s hardly alone in having expected higher inflation than we have seen.