Authors interested in presenting inflation-related research at the conference, to be held September 29–30 in Frankfurt, Germany, should submit papers through Conference Maker.
Hammack’s speeches highlight importance of patient monetary policy
The behavior of inflation expectations will be important to monitor as the Federal Open Market Committee considers the outlook for monetary policy, Cleveland Fed president Beth Hammack said in a pair of recent speeches.
Conversations on Central Banking highlights Fed’s framework review
The latest edition in our series on inflation and monetary policy included discussion of the Fed’s current reassessment of its monetary policy strategy, tools, and communications.
The Fed’s monetary policy framework review incorporates a series of public listening events, including one sponsored by the Cleveland Fed and hosted by President Hammack on June 27 at the Bank’s signature community development conference.
Inflation: Drivers and Dynamics 2025 conference call for papers
Authors interested in presenting inflation-related research at the conference, to be held September 29–30 in Frankfurt, Germany, should submit papers through Conference Maker.
Watch this indicator for our model-based estimates of the expected rate of inflation, along with the inflation risk premium, the real risk premium, and the real interest rate.
Look here for daily nowcasts of inflation for two popular price indexes, the personal consumption expenditures (PCE) price index and the consumer price index (CPI).
Indirect Consumer Inflation Expectations (ICIE) Series
In addition to producing our own in-house indicators and data, we work with the Morning Consult survey firm to publish the Indirect Consumer Inflation Expectations series on the Central Bank Research Association website.
Residual Seasonality in Five Measures of PCE Inflation
Kurt G. Lunsford
I document residual seasonality in five measures of PCE inflation: headline, core, market-based core, median, and trimmed mean. While these measures are all computed from seasonally adjusted data, I show that each of these measures has had low average monthly inflation in November and December and high average monthly inflation in January from 1987 through the beginning of 2025. The difference in inflation rates from November and December to January is economically and statistically significant. This timing for residual seasonality often gives the impression that monthly inflation is low at the end of the calendar year and jumps to start the year.
Productivity growth has shown a notable pickup since the fourth quarter of 2019, and some commentators cite artificial intelligence and other factors as reasons why technological progress can sustain this faster pace. Motivated by this consideration, we use a model designed to detect trend shifts to examine the behavior of productivity growth in the postwar period. The model allows for shifts between high- and low-growth productivity regimes and estimates the probability of being in one regime or the other. We find that recent data provide tentative support for a higher trend growth rate, with the model estimating about a 40 percent probability that the economy is in a high-growth productivity regime.
Endogenous Labor Supply in an Estimated New-Keynesian Model: Nominal versus Real Rigidities
Isabel Cairó, Hess T. Chung, Francesco Ferrante, Cristina Fuentes-Albero, Camilo Morales-Jiménez, Damjan Pfajfar
Standard macroeconomic models find it difficult to reconcile slow recoveries and missing disinflations after deep deteriorations in the labor market. We develop and estimate a New-Keynesian model with search and matching frictions in the labor market, endogenous intensive and extensive labor supply decisions, and financial frictions. We conclude that the estimated combination of a low degree of nominal wage rigidities and a high degree of real wage rigidities, together with a small role for prematch costs relative to postmatch costs, is key in successfully forecasting slow recoveries in unemployment and missing disinflations in the aftermath of recessions, such as the Great Recession. We find that data on endogenous labor supply decisions (participation and hours) are very informative about the relative degree of nominal and real wage rigidities and the slope of the Phillips curve. We also show that none of the model-based labor market gaps is a sufficient statistic of labor market slack, but all contain relevant information about the state of the economy summarized in a new indicator for labor market slack that we propose.
