The Federal Reserve Bank of Philadelphia released a report yesterday showing that many major economists have lowered their inflation forecasts, down even from the tepid level it's been at. The Fed's Survey of Professional Forecasters indicates that inflation will stay below the Fed's target rate of 2 percent through at least 2016.
The surveyed forecasters predict the Personal Consumption Expenditures price index will average 1.5 percent for this year, down from their 1.8 percent estimate of three months ago. The group also reduced their view of expected inflation next year from 2 percent to 1.8 percent, and from 2.0 percent in 2016 to 1.9 percent.
Annual inflation is currently running at 1.4 percent. Many economists feared that the Fed's asset-buying program might lead to higher inflation, so with that now coming to an end, it appears that our already-low inflation has nothing left to fuel a higher run.
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