Mod clarification (I don't hold a position): this is clearly talking about PCE; that's what the Fed has a goal for.

Does anyone wish to present an argument to the contrary? CPI is a common inflation metric and would probably be what I would recommend as the metric if there wasn't any clarification at all, but I believe the inclusion of the goal as reference point makes PCE better match market intent.

@JamesF If you wish to clarify please do so within the next 48 hours; we need something here and mod team clarification is better than nothing.

@EvanDaniel the creator mentions CPI downthread - not explicitly saying that's what this market resolves on, but suggestive:

The CPI is up for March now at 3.5%

The specific numbers and dates they refer to in the description match the CPI.

The description says:

The current inflation rate is 3.2%

At market creation (you can see in the edit history), this read

The current inflation rate is 3.1% (going to be updated on March 12)

And indeed the latest CPI release (Jan 2024) at market creation was for 3.1% CPI growth, and March 12 was the date of the next CPI release, after which the creator updated the number in the description to 3.2%, matching that CPI release.

PCE data releases are on different dates, and the latest PCE prices index YoY figure at market creation was 2.8%

The 2.5% figure in the title ("current: 2.5%") appears to be an error and doesn't match data releases are the time, and doesn't make sense with the logic in the description of picking a value between the current value and the target.

(I do hold a position, though I have no idea whether it benefits me for this to resolve on PCE vs CPI, I haven't compared recent trends between the two)

Links:

CPI Jan 2024 https://www.bls.gov/news.release/archives/cpi_02132024.htm

CPI Feb 2024 https://www.bls.gov/news.release/archives/cpi_03122024.htm

PCE Jan 2024: https://www.bea.gov/news/2024/personal-income-and-outlays-january-2024

@chrisjbillington Got it. Sorry, I skimmed past the CPI comment. OK, so it's a mess, and my current best guess is that the creator meant CPI and didn't realize the target was about PCE.

Thanks for the reply! I'm not going to do anything "official" yet and will try to get other mods to weigh in.

@EvanDaniel I agree with CPI. I’d add that first line of description notes published by BLS (which publishes CPI), whereas I believe BEA publishes PCE. That seems pretty definitive.

@Tyler31 I didn't know this before today but the Fed is more explicit than I expected about 2% PCE specifically being their target:

https://www.federalreserve.gov/economy-at-a-glance-inflation-pce.htm

What is the Fed's inflation target?

The Federal Reserve seeks to achieve inflation at the rate of 2 percent over the longer run as measured by the annual change in the price index for personal consumption expenditures (PCE).

Prior to today I thought it was a case of their target being CPI, but that PCE growth was a better predictor of CPI growth than CPI growth itself (because less noisy, among other reasons) so in practice they used that.

That's kind of what it's like in Australia, where I believe CPI is the official target, but that the Reserve Bank tends to look at "trimmed mean" inflation which is less noisy.

But nope, apparently their target is just PCE itself!

@chrisjbillington I also just learned how explicit the Fed is, had to edit my comment :)

@JamesF @mods I think we’re going to need some clarity on exactly which measure of inflation this market will resolve on. It’s looking like it will be close.

How are you people so sure? Aren't these things hard to predict even by professionals? (comment made at 16%)

@Shai a lot of the time is professionals have to be very careful with how they speak about bad things happening. It's very easy to go from saying the world is falling to an SEC charge for manipulating the stock market. But a lot of people have been panicking for a long time

The sweepstakes market for this question has been resolved to partial as we are shutting down sweepstakes. Please read the full announcement here. The mana market will continue as usual.

Only markets closing before March 3rd will be left open for trading and will be resolved as usual.

Users will be able to cashout or donate their entire sweepcash balance, regardless of whether it has been won in a sweepstakes or not, by March 28th (for amounts above our minimum threshold of $25).

@creator CPI all?

Any president would have a hard time taming inflation below 2,5%.

Inflationary:

Tariffs, protectionism & war.

Deflationary:

Drill baby drill, deregulation & cutting government spending.

FED updates inflation forecasts for Q4 2025 upwards upon incorporating Trump's conditional policies: https://x.com/NickTimiraos/status/1869481081256476682

My base case is that the fed will struggle to further lower inflation towards its target of 2% regardless. Even moreso under stated Trump policies.

In any month of the year, or for the whole year?

@JamesThele419b Whole year

I think there are widespread expectations among experts that his plans would push it above 2.5%. The question is instead how much of his plans congress lets him get away with, and how much of his plans he actually intends to enact vs talking about theatrically to win the votes of the many people who believe whatever he says because they don't keep track of his actions. https://apnews.com/article/trump-inflation-tariffs-taxes-immigration-federal-reserve-a18de763fcc01557258c7f33cab375ed

@SoniaAlbrecht Although his plans might be inflationary I think the one thing he wants more than anything is low inflation. I expect him to adjust the plans to keep inflation low if it means he can't deliver on certain things. But maybe he'll target 3% or something, who knows.

https://www.wsj.com/politics/elections/economists-say-inflation-deficits-will-be-higher-under-trump-than-harris-0365588e

WASHINGTON—Most economists think inflation, interest rates and deficits would be higher under the policies former President Donald Trump would pursue in a second administration than under those proposed by Vice President Kamala Harris, according to a quarterly survey by The Wall Street Journal.

Trump just announced that he would make tariffs on all imported goods at 20%, which would be very inflationary.

@JamesF can you clarify the exact measure (eg total or core cpi)?

@ManifoldPolitics clarity for the sweep market would be appreciated, too!

Here I go asking questions and answering them myself. I checked the question history against CPI data from YCharts, and it seems to be CPI.

Question created Mar 9, 2024, 6:38:42 PM

Resolution based on BLS data

Mar 9, 6:56pm: The current inflation rate is 3.1%

Mar 12, 6:43pm: Current 3.2%

Apr 11, 7:38am: Current 3.5%

Sep 11, 4:34pm: Current 2.5%

March 12, 2024 report covers Feb 2024

Ezra Klein:

Trump has a bold, ambitious agenda to make prices much, much higher. He’s proposing a 10 percent tariff on imported goods, and a 60 percent tariff on products from China. He wants to deport huge numbers of immigrants. And he’s made it clear that he’d like to replace the Federal Reserve chair with someone more willing to take orders from him

[The Ezra Klein Show] Trump’s Bold Vision for America: Higher Prices! #theEzraKleinShow https://podcastaddict.com/the-ezra-klein-show/episode/178092115

https://www.axios.com/2024/06/25/nobel-prize-winners-biden-economy-trump-inflation