Headline CPI Forecast
The Graph of the Week comes from the November 2007 NABE Outlook and shows the forecast for the headline CPI forecast
The panel slightly raised its forecast for headline inflation in 2008 but nudged down its projection for “core” inflation. It now expects the Consumer Price Index to rise 2.3% (on a fourth-quarter-to-fourth-quarter basis) compared with the 2.2% projected in September. At the same time, forecasters apparently believe that slower growth over the near term will limit the rise in “core” inflation in 2008 (as measured by the rise in the personal consumption expenditures price index excluding food and energy) to 1.9%. This compares with the 2.0% projection made in September and would remain just within the Federal Reserve’s perceived comfort zone of 1.0% to 2.0%.
NABE members can read the full NABE Outlook here. A summary is available for the public.