Here is Stephen Williamson:
We can use inflation swaps data, as Summers does; we can look at the breakeven rates implied by the yields on nominal Treasury securities and TIPS; and we can look at survey measures. What do people who do forecasting for a living, and who have access to all of that data, say? The Philly Fed’s most recent Survey of Professional Forecasters has predictions of PCE headline inflation for 2016 and 2017, respectively, of 1.8% and 1.9%, which is pretty close to the 2% PCE inflation target. A Wall Street Journal survey shows a CPI inflation forecast that seems roughly consistent with the December FOMC projections for PCE inflation. So, it seems that “most available data,” filtered through the minds and models of professional forecasters, suggests no less optimism than the FOMC is expressing in its projections, about achieving 2% inflation in the future.
Most of the post is about Summers, but I am more interested in noting that the Fed can indeed achieve — at least roughly — the rate of price inflation it desisres. Under liquidity trap theories, you would think that price inertia would have worn off a bit by now, but if anything the American economy seems to be converging to somewhat higher rates of price inflation, which is not what the theory predicts.