32 Energy and food prices over the second half of 2017 are assumed to rise at annual rates of 10 percent and 1.6 percent, respectively; these assumptions (which take into account published monthly PCE data through July and published CPI data through August, as well as recent movements in gasoline prices in the wake of Hurricanes Harvey and Irma) ensure that the combined contribution of food and energy prices to inflation in 2017 is consistent with the median difference between FOMC participants’ projections for total and core inflation.
Finally, nominal spending shares for food, energy, and core imports are assumed to remain unchanged at their 2017:Q2 levels, and long-run inflation expectations are assumed to remain constant at 2 percent.