The Phillip's curve is obsolete. Inflation does not reliably depend on employment. So what other model could we depend on?
This one showing core inflation plotted against an aggregate corporate profit rate minus a mix of nominal rates. (FRED data link)
Mixed nominal rate = 0.56*Fed rate + 0.44*10-year treasury
Here we have quarterly data since 1958. That is 234 data points! Inflation has stayed within the range filled in with red for all those years.
In this graph, we see the last 8 quarters of data highlighted in red. Corporate profit rates have fallen some. The mixed nominal has actually dropped a bit too, but corp. profits rates have dropped more.
The dark blue arrow marks the predicted upper limit of core inflation according to the pattern set up in the model.
So the model predicts that core inflation will ride along or under this upper limit of around 2.2% as the data points move left on the graph.
Does core inflation show signs of moving along the upper limit?
Here is core inflation over last 8 quarters (monthly data)...
Core inflation rose to around 2.2% and looks to have stabilized at the upper limit in the model above. I predict that core inflation will continue to follow closely to the projected upper limit.