Economic Letter

How Much Do Supply and Demand Drive Inflation?

Inflation has remained at levels well above the Federal Reserve’s inflation goal of 2% for over a year. Separating the underlying data from the PCE price index into supply- versus demand-driven categories reveals that supply factors explain about half of the run-up in current inflation levels. Demand factors are responsible for about one-third, with the remainder resulting from ambiguous factors.

The SF Fed’s Commitment to Equity

The San Francisco Fed is dedicated to building an economy that works for everyone and helping ensure all Americans have the opportunity to fully realize their potential. We champion equity because research has demonstrated it supports our full employment mandate and our mission to promote a healthy and sustainable economy.

Career Opportunities

The San Francisco Fed is dedicated to building an economy that works for everyone. We thrive on reflecting the people we serve by hiring talented individuals from diverse backgrounds and creating a culture of inclusion where people are respected for what they do and for who they are.