Inflation

Welcome to our State Space series. Here you will find how we’re thinking about the pathways and scenarios that could take us to critical economic states.

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%. If you are interested in

Core-Cast is our real-time nowcasting model that tracks the Fed's preferred inflation gauges before and through their release date. Most of the Personal Consumption Expenditures (PCE) inflation gauges are sourced from Consumer Price Index (CPI) data, but translation from CPI to PCE must be done with care. Meanwhile,

We're doing the dirty work of translating inflation inputs into PCE in real-time for you. There are some dark parts of PCE not related to CPI and PPI; we'll be back with an update when PCE is released. The associated heatmaps are dense, but they aim

We're doing the dirty work of translating CPI to PCE in real-time for you. We'll be back on Thursday to provide an update after the PPI release, which will inevitably reshape the nowcast. The associated heatmaps are somewhat dense and intense: they give a holistic view

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

We'll have our usual monthly inflation preview soon, but for those curious, here's a bit of a preview to the preview... We all should take heart in how 2022H2 highlighted the possibility and plausibility of a 'soft landing'—disinflation without more unemployment—at odds