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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288 Posts
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Feb 14, 2023
Summary: Relative to consensus forecasts, the risks for January & Q1 core inflation are now asymmetrically tilted to the upside (Jan core CPI ~ 0.4%). While we don't think the causes for upside risk are a sound basis for hawkish panic, the Fed would certainly be vulnerable to
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CPI
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Feb 12, 2023
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Jan 11, 2023
Jan 11, 2023
A soft landing consensus for CPI? The forecasting consensus is sticking close to its November predictions, with a 0.3% increase expected for core CPI (falling from 6% to 5.7% year-over-year) and -0.1% for headline CPI (falling from 7.1% to 6.5% year-over-year)
Dec 12, 2022
Not out of the woods yet on upside risks to monthly core CPI inflation: The forecasting consensus has shifted down from its 0.5% expectation for core CPI in October to a more optimistic 0.3% expectation in November. This seems to be mostly a reaction to the welcome core
Headline CPI: Modest upside risk vs. forecasting consensus * Consensus: 0.6% month-over-month, 7.9% year-over-year * Gasoline prices did not play a major role in October, with only a minor non-seasonally-adjusted increase from September to October at the retail level. * Energy services inflation should be
Oct 12, 2022
September headline CPI inflation will likely come in near the consensus forecast of 0.2% as gyrations in commodity markets slow. In our view, upside risks weigh more heavily to the non-core components of inflation relative to consensus because of how the ‘Russia shock’ affects a number of food
Sep 09, 2022
August headline CPI inflation will likely come in close to the consensus forecast at -0.1% – which would be the lowest single-month reading since the onset of the pandemic.