from Zero Hedge
In late August, the Fed unveiled its new flexible Average Inflation Targeting (fAIT) paradigm which while still lacking strict forward guidance and operational parameters (what is the target inflation? what is the lookback period? how long will the overshoot last) means that – according to the latest FOMC projections – the Fed expects rates to be at zero at least until 2023.
There is just one problem (well technically two): for the Fed’s AIT scheme to work, inflation will have to be low enough to where even if it rises above the 2% long-term target, the overshoot will be manageable and won’t take place for a while. However, it now appears that even official readings of both goods and wage inflation, are starting to creep up substantially and could jeopardize the Fed’s inflation overshoot target as soon as 2021.