Instantaneous Inflation: PCE, Market Based PCE, HICP, CPI, And Chained CPI
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With PCE deflators released today:
Figure 1: Instantaneous inflation (T=12, a=4) for CPI (blue), chained CPI (dark red), PCE deflator (bold black), PCE market based deflator (scarlet), and HICP (green), per Eeckhout (2023). tan salmon horizontal line at 2% target for PCE deflator. Corresponding CPI target is 2.45%. Chained CPI and HICP seasonally adjusted by author using X-13. Source: BLS, BEA, Economic Commission, and author’s calculations.
Note that instantaneous PCE deflator inflation is below the 2% target (y/y is 2.1%).
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