Liberty Street Economics: The Layers of Inflation Persistence

F E D E R A L   R E S E R V E   B A N K   o f   N E W  Y O R K LIBERTY STREET ECONOMICS   The Layers of Inflation Persistence     Martín Almuzara, Marek Jarocinski, and Argia Sbordone    This post extends analysis of the multivariate core trend introduced in April 2022 to data through November and detects signs of a decline in the persistent component of inflation. Dissection of the sectoral layers of inflation persistence shows the results are consistent with President Williams "onion" metaphor that identifies the three important layers of inflation as core goods, core services ex-housing, and housing. However, while the housing sector stands apart, the differences between the recent evolution of core goods and services ex-housing are smaller and subtler.    READ MORE

 

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