The Fed's preferred inflation gauges are deflators of Personal Consumption Expenditures (PCE), the consumer spending component of GDP. These price indices are based on a few input data sources, including the Consumer Price Indices (CPI),Producer Price Indices (PPI), and Import Price Index (IPI), but are methodologically distinct from them. We usually have a decent read of PCE deflators after CPI (which tends to be the first inflation gauge released), but there are a lot of controls and calculations to account for. When updating views month to month about inflation, the dirty work here matters.
Core Cast
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250 Posts
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State Space
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Jun 27, 2023
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Core-Cast
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Jun 14, 2023
Core-Cast is our nowcasting model to track the Fed's preferred inflation gauges before and through their release date. The heatmaps below give a comprehensive view of how inflation components and themes are performing relative to what transpires when inflation is running at 2%. Most of the Personal Consumption
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Core-Cast
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Jun 13, 2023
Summary: The risks for May (CPI) are still tangibly to the upside, but developments from April CPI do shade favorably relative to what was the baseline headed into the April CPI preview.