The 12-month window we use in computing inflation now captures the rebound in prices but not the initial decline, temporarily elevating reported inflation. These effects, which are adding a few tenths to measured inflation, should wash out over time. We consult a range of measures meant to capture whether price increases for particular items are spilling over into broad-based inflation.
These include trimmed mean measures and measures excluding durables and computed from just before the pandemic. These measures generally show inflation at or close to our 2 percent longer-run objective (figure 3). We would be concerned at signs that inflationary pressures were spreading more broadly through the economy. 2.