Accelerating Inflation: The Attack of the Job Killers

The job killers (proponents of Fed rate hikes) seized on some modest upticks in the January inflation data to argue that the economy is near capacity and the Fed should be pushing up interest rates. After all, the core (excluding food and energy) consumer price index (CPI) rose by 2.2 percent over the last year, somewhat over the Fed’s 2.0 percent target. That’s pretty scary stuff.

I’ll make a few quick points here. First, the Fed officially targets the core personal consumption expenditure...