Excluding volatile food and energy costs, the personal consumption expenditures price index rose 1.6 percent in March from a year earlier. That compares with the Fed’s 2 percent inflation target.
U.S. and global growth was also slowing a quarter of a century ago, if anything more markedly than now.
Other similarities: The Fed plowed ahead with rate drops in 1995-96 even though it judged the labor market to be pretty tight and stock prices to be buoyant. Indeed, it was in December 1996 that then Fed Chairman Alan Greenspan warned of “irrational exuberance’’ in financial markets.
And then there is the politics. President Bill Clinton was up for re-election in 1996 while Donald Trump faces the voters next year.
Clinton refrained from openly commenting on Fed policy after his economic team told him that public pressure on the independent central bank could prove counter-productive.
Trump has not been so reticent, repeatedly calling on Powell & Co. to open up the monetary spigots in order to juice the economy and the stock market.
Trump’s acolytes argue that his tax cuts and deregulatory actions are paving the way for a productivity-driven economic boom that won’t spur inflation.
If that came about -- and many economists are skeptical it will -- it would be akin to the late 1990s surge in growth that stemmed from the proliferation of the Internet.
Former Fed Vice Chairman Alan Blinder, who led the charge for lower rates in 1995, cautioned against drawing too many parallels to today.
One big difference, according to Blinder: The Fed had clearly raised rates too far back then, jacking them up by 0.75 percentage point in November 1994 and 0.5 point in February 1995 before beginning to trim them back in July of that year.