From Popina, McCormick and Beyond, “Traders Lose Trust…”, Bloomberg Nowadays:
source: Popina et al., Bloomberg, January 11, 2023.
I think it makes sense to compare that to the near-term projections from the Cleveland Fed. Below are the headline and core CPI levels.
figure 1: CPI levels, 1982-84=100 (black), Cleveland Fed nowcast as of Jan 11, 2023 (pink squares), high and low forecasts (gray +). Source: BLS via FRED, cleveland fed, Bloomberg (1/11/23)the author’s calculation.
figure 2: Core CPI levels, 1982-84=100 (black), Cleveland Fed’s latest forecast as of Jan 11, 2023 (pink squares), high and low forecasts (gray +). Source: BLS via FRED, cleveland fed, Bloomberg (1/11/23)the author’s calculation.
What does this mean for core inflation? In Figure 3, I plot actual and implied inflation rates.
image 3: Quarter-over-quarter core CPI inflation, annualized (black), Cleveland Fed’s immediate forecast as of January 11, 2023 (pink squares), high and low forecasts (gray +). Source: BLS via FRED, cleveland fed, Bloomberg (1/11/23)the author’s calculation.
Even with the overstatement of the Cleveland Fed’s near-term forecast, core inflation is still falling.
