Fed's Lacker and Inflation

In an interview today with Bloomberg TV, Richmond Fed President and inflation hawk Jeffrey Lacker made several comments regarding inflation. In the interview, he said that he regards core inflation of 2.5% as a 'little high', and would prefer a rate of 1.5%. Looking at core inflation over the last 50 years, using the core CPI shows that readings at or below Lacker's preferred rate have been rare. Over the last fifty years, over 90% of all monthly core CPI readings have been above 1.5%. During that same period, the average core inflation reading has been 4.1%, which is nearly three times Lacker's preferred reading. While we don't want to minimize the very real threat of high inflation, we would note that Lacker's preferred rate of inflation is as realistic as a $10 fill up at the gas station.