So if import prices, resource utilization, and transitory factors together do not provide a complete account, why has inflation been so much lower in the past few years than it was previously? In many of the models economists use to analyze inflation, a key feature is “underlying,” or trend, inflation, which is believed to anchor the rate of inflation over a fairly long horizon.
The March SEP showed a median projection of 2.8 percent GDP growth in 2022 and a policy rate path that almost reached 2 percent by year-end.