An aggregation exercise is proposed that aims at investigating whether the fast average adjustment of the disaggregate inflation series of the euro area CPI translates into the slow adjustment of euro area aggregate inflation. We first estimate a dynamic factor model for 404 inflation...

The Median CPI is well-known as an accurate predictor of future infl ation. But it’s just one of many possible trimmed-mean inflation measures. Recent research compares these types of measures to see which tracks future inflation best. Not only does the Median CPI outperform other trims in...

The recent surge in commodity prices has rekindled interest in their power to predict consumer price inflation. But is this interest warranted? In examining the empirical relationship between commodity prices and consumer price inflation, this article finds that commodities' reputation as useful...

Over the long term, steady job growth requires low and stable inflation. In this special issue of Forefront, Federal Reserve Bank of Cleveland President Sandra Pianalto explains why price stability is essential for maximum employment and how the adoption of a numerical target for inflation may...

The recent run-ups in oil and other commodity prices and their implications for inflation and monetary policy have grabbed the attention of many commentators in the media. Clearly, higher prices of food and energy end up in the broadest measures of consumer price inflation, such as the Consumer...

Remarks at the Barclays 16th Annual Global Inflation-Linked Conference, New York City.

This paper reinvestigates the performance of trimmed-mean inflation measures some 20 years since their inception, asking whether there is a particular trimmed mean measure that dominates the median CPI. Unlike previous research, we evaluate the performance of symmetric and asymmetric...

In the face of falling house prices, decreasing rates of homeownership, and a glut of vacant homes, the Consumer Price Index’s measure of the cost of owner-occupied housing—owners’ equivalent rent of residence (OER)—has begun to accelerate, rising at an annualized rate of 2.3 percent...

Remarks at the Barclays 16th Annual Global Inflation-Linked Conference, New York City.

This paper examines the inflation "pass-through" problem in American monetary policy, defined as the relationship between changes in the growth rates of individual goods and the subsequent economy-wide rate of growth of consumer prices. Granger causality tests robust to structural breaks are...