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Fed Inflation Gauge With “Greater Forecast Accuracy” at 12-Year High

Confounded Interest  ( Original )
APR 12, 2018

Digging deeper than the simple and rote price-only inflation gauges, the New York Fed’s Underlying Inflation Gauge takes a wider and more comprehensive view of inflation. Per Simon Potter, head of the Fed’s New York Markets Group:

“Among its attractive features, the UIG is derived from a large data set that extends beyond price variables and displays greater forecast accuracy than various measures of core inflation.”

 Okay, now that we’ve established that this is the inflation number we should really be paying attention to, what’s it indicating these days?

The New York Fed’s Underlying Inflation Gauge (UIG) is the hottest since 2006 at 3.14%.

The FRBNY’s Underlying Inflation Gauge captures sustained movements in inflation from information contained in a broad set of price, real activity, and financial data.

ORIGINAL SOURCE: “Underlying Inflation” hottest since July 2006 (3.14%) While Core PCE Prices YoY Still Stuck At 1.6% at Confounded Interest on 4/12/18