Where Has All the Inflation Gone? When Will the Fed Ever Learn?

The Fed is dazed and confused (with apologies to Jake Holmes) about the lack of goods/services price inflation currently present in the U.S. economy. No matter how you slice or dice the Personal Consumption Expenditures (PCE) Chain Price Index, its annualized growth has not trended above 2% since 2011. How can this be given that the unemployment rate of those covered by unemployment insurance is at an historic low of 1.3% (see Chart 2)? Wherefore art thou, A.W. Phillips and your curve purporting to show an inverse relationship between the level of the unemployment rate and the rate of goods/services price inflation?

Why the Fed is bothered by the lack of consumer price inflation is a mystery to me. With whatever unemployment rate you choose plumbing cycle, if not decade lows, why is the Fed concerned by persistent low consumer price inflation? Is this not an outcome to celebrate rather than despair?