Nowcasted PCE Instantaneous Inflation Moving Away from 2% Target

Using Cleveland Fed nowcasts post-CPI release:

Figure 1: Instantaneous inflation (T=12,a=4) for PCE (blue), core PCE deflator (red), all in decimal form %. December observations are nowcasts as of 2/13 from Cleveland Fed. Calculations per Eeckhout (2023).Source: BEA, Cleveland Fed, and author’s calculations.

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