, Columnist
There Goes the Fed's Credibility
Low inflation suggests the central bank can't keep its promises.
Focus on the target.
Photographer: Ian Walton/Getty ImagesThis article is for subscribers only.
Back in January 2012, the Federal Reserve promised to keep its preferred measure of inflation close to 2 percent over the longer run. More than three years later, that promise remains unfulfilled, casting doubt on the central bank's willingness to deliver.
The latest reading for the measure, known as the price index for personal consumption expenditures, showed annual inflation running at only 1.1 percent in April. Excluding volatile food and energy prices, the inflation rate was 1.6 percent. Here's a chart showing how both have fallen well short of 2 percent for more than three years: