Instantaneous PCE Inflation with Nowcasts/Tracking
Original Report
Goldman Sachs tracking ticks higher core PCE inflation for February. The Cleveland Fed’s core nowcast imply lower instantaneous inflation for February and March. Figure 1: Instantaneous inflation...
Goldman Sachs tracking ticks higher core PCE inflation for February. The Cleveland Fed’s core nowcast imply lower instantaneous inflation for February and March. Figure 1: Instantaneous inflation (T=12, a=4, per Eeckhout (2023)) for PCE deflator (blue), implied from Cleveland Fed (light blue), implied from Goldman Sachs (teal square), for core PCE deflator (brown), implied from […]
Glass House Analysis
Central bank policy decisions made in boardrooms cascade through the economy in ways that touch everyone. A quarter-point rate change might seem abstract, but it determines whether young families can afford homes, whether businesses can afford to hire, and whether retirees see meaningful returns on their savings. The tension between fighting inflation and maintaining employment represents a fundamental tradeoff in economic policy—one that invariably creates winners and losers.
Inflation is the silent tax that erodes purchasing power, hitting hardest those who can least afford it. When grocery bills rise faster than wages, families face impossible choices between food, medicine, and rent. Unlike market volatility that mainly affects investors, inflation touches everyone who buys groceries, fills a gas tank, or pays rent.
The implications extend beyond the immediate news cycle. Every economic development creates ripples that affect employment, prices, and opportunities in ways that may not be immediately visible but are deeply felt. By tracking these connections, we can better understand how the economy truly works—not as an abstract machine, but as a human system shaped by and shaping the lives of millions.
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