Research and Insights on Inflation and Monetary Policy

High inflation continues to have a significant impact on communities across the United States. Bringing inflation back to the FOMC’s longer-run average goal of 2% is currently a top priority for the Fed. This page provides a searchable archive of recent insights and research from the SF Fed on inflation, monetary policy, economic conditions, financial conditions, and the Fed’s ongoing efforts to restore price stability.

Featured Inflation Content

Forward-Looking Policy in a Real-Time World

Restoring price stability is a key part of the Fed’s mandate, and it is what the American people expect. Achieving it will take time and a broad view of economic conditions. Policymakers have to respond to an economy that is evolving in real time and prepare for what the economy will look like in the future.

Mix of Inflation Contributors Is Changing
Core services inflation has been rising over the past year, while goods inflation and energy inflation have been moderating in recent months. This means the mix of inflation contributors is changing, with services becoming a more substantial part of overall inflation.

Can Monetary Policy Tame Rent Inflation?
Because the cost of housing is an important component of total U.S. consumer spending, high rent inflation has contributed to elevated levels of overall inflation. Evidence suggests that, as monetary policy tightening cools housing markets, it can also reduce rent inflation, although this tends to adjust relatively slowly.

Inflation and Monetary Policy Indicators and Data

Cyclical and Acyclical Core PCE Inflation

PCE Inflation Dispersion

Supply- and Demand-Driven PCE Inflation

Proxy Funds Rate

Key Inflation Content (and how Monetary Policy seeks to address it)

Changing Consumption Patterns

Goods consumption is moderating while services consumption is rising back toward its pre-pandemic trend line. Each of these adjustments suggest the economy may be normalizing.

House Prices Respond Promptly to Monetary Policy Surprises

New evidence based on listings of homes for sale from 2000 to 2019 suggests house prices adjust to monetary policy changes over weeks rather than years, faster than previously thought.

Monetary Policy Stance Is Tighter than Federal Funds Rate

A proxy federal funds rate that incorporates data from financial markets shows that, since late 2021, broader monetary policy has been substantially tighter than the federal funds rate alone.

What If? Monetary Policy in Hindsight

A study on the timing of monetary policy suggests that, if the Federal Reserve had begun tightening policy in March 2021, inflation would have been only about 1 percentage point lower as of June 2022, while unemployment would be about 2 percentage points higher.

How Much Do Supply and Demand Drive Inflation?

Separating the underlying data from the personal consumption expenditures price index into supply- versus demand-driven categories reveals that supply factors explain about half of the run-up in recent inflation levels while demand factors are responsible for about one-third.

Can the News Drive Inflation Expectations?

Analyzing the volume and sentiment of daily news articles on inflation suggests that one-fourth of the increased gap between higher inflation expectations for households compared with professional estimates can be attributed to heightened negative media coverage.

Recent Content on Inflation

Rising Interest Rates Dampen District’s Housing Market Activity

SF Fed Blog | Posted January 20, 2023

Finding a Way to Measure How Tight Monetary Policy Is

SF Fed Blog | Posted December 1, 2022

FedViews: December 1, 2022

FedViews | Posted December 1, 2022

Oil Shocks when Interest Rates Are at the Zero Lower Bound

Economic Letter | Posted November 30, 2022

Resolute and Mindful: The Path to Price Stability

Economic Letter | Posted November 28, 2022

Can the News Drive Inflation Expectations?

Economic Letter | Posted November 14, 2022

How Is Inflation Affecting Our Paychecks? Watch Our Latest Tutorial Video

SF Fed Blog | Posted October 20, 2022

FedViews: October 20, 2022

FedViews | Posted October 20, 2022

Comparing Measures of Housing Inflation

Economic Letter | Posted October 17, 2022

Beyond the Numbers: Amidst Signs of Progress, Inflation Concerns Persist in the Federal Reserve’s Twelfth District

SF Fed Blog | Posted October 13, 2022

What If? Monetary Policy in Hindsight

Economic Letter | Posted October 11, 2022

The Singularity of the Dual Mandate

Economic Letter | Posted October 3, 2022

Remote Work and Housing Demand

Economic Letter | Posted September 26, 2022

Charting New Stories with SF Fed Data Explorer

SF Fed Blog | Posted September 8, 2022

FedViews: September 8, 2022

FedViews | Posted September 8, 2022

Wage Growth When Inflation Is High

Economic Letter | Posted September 6, 2022

Will Workers Demand Cost-of-Living Adjustments?

Economic Letter | Posted August 8, 2022

COVID-19 Fiscal Expansion and Inflation Expectations in Japan

Economic Letter | Posted August 3, 2022

FedViews: July 14, 2022

FedViews | Posted July 14, 2022

The Increase in Inflation Compensation: What’s Up?

Economic Letter | Posted July 5, 2022

Policy Nimbleness Through Forward Guidance

Economic Letter | Posted June 28, 2022

How Much Do Supply and Demand Drive Inflation?

Economic Letter | Posted June 21, 2022

60-Second Explainer: How the Fed is Working to Lower Inflation

SF Fed Blog | Posted June 2, 2022

FedViews: June 2, 2022

FedViews | Posted June 2, 2022

Estimating Natural Rates of Unemployment

Economic Letter | Posted May 31, 2022

Watch FOMC Rewind Live, May 2022 – Insights on Fed Policy Announcements

SF Fed Blog | Posted May 25, 2022

Untangling Persistent versus Transitory Shocks to Inflation

Economic Letter | Posted May 23, 2022

Current Recession Risk According to the Yield Curve

Economic Letter | Posted May 9, 2022

Steering Toward Sustainable Growth

Economic Letter | Posted April 22, 2022

FedViews: April 21, 2022

FedViews | Posted April 21, 2022

Watch FOMC Rewind Live—Conversations Breaking Down Fed Policy Announcements

SF Fed Blog | Posted April 14, 2022

Watch: Will Rising Rents Push Up Future Inflation?

SF Fed Blog | Posted March 31, 2022

Why Is U.S. Inflation Higher than in Other Countries?

Economic Letter | Posted March 28, 2022

Beyond the Numbers: Inflation Concerns in the Federal Reserve’s Twelfth District

SF Fed Blog | Posted March 4, 2022

This Time Is Different…Because We Are

Economic Letter | Posted February 28, 2022

What’s the Best Measure of Economic Slack?

Economic Letter | Posted February 22, 2022

Will Rising Rents Push Up Future Inflation?

Economic Letter | Posted February 14, 2022

FedViews: February 10, 2022

FedViews | Posted February 10, 2022

FedViews: January 14, 2022

FedViews | Posted January 14, 2022

Average Inflation Targeting in the Financial Crisis Recovery

Economic Letter | Posted January 10, 2022

FedViews: December 2, 2021

FedViews | Posted December 2, 2021

Policymaking in a Time of Uncertainty

Economic Letter | Posted November 19, 2021

Is the American Rescue Plan Taking Us Back to the ’60s?

Economic Letter | Posted October 18, 2021

FedViews: October 7, 2021

FedViews | Posted October 7, 2021

FedViews: September 9, 2021

FedViews | Posted September 9, 2021

Return of the Original Phillips Curve

Economic Letter | Posted August 9, 2021

FedViews: July 15, 2021

FedViews | Posted July 15, 2021

Do Households Expect Inflation When Commodities Surge?

Economic Letter | Posted July 12, 2021

FedViews: June 3, 2021

FedViews | Posted June 3, 2021

Fiscal Multiplier at the Zero Bound: Evidence from Japan

Economic Letter | Posted May 24, 2021

FedViews: April 8, 2021

FedViews | Posted April 8, 2021

Disagreement about U.S. and Euro-Area Inflation Forecasts

Economic Letter | Posted March 22, 2021

Lessons from History, Policy for Today

Economic Letter | Posted March 4, 2021

FedViews: March 4, 2021

FedViews | Posted March 4, 2021

SF Fed Launches Tool to Forecast COVID-19 Infections by County

SF Fed Blog | Posted February 3, 2021

Can Government Spending Help to Escape Recessions?

Economic Letter | Posted February 1, 2021

FedViews: January 14, 2021

FedViews | Posted January 14, 2021

The Asymmetric Costs of Misperceiving R-star

Economic Letter | Posted January 11, 2021

2020 Lessons, 2021 Priorities

Economic Letter | Posted December 3, 2020

FedViews: December 3, 2020

FedViews | Posted December 3, 2020

Is the Federal Reserve Contributing to Economic Inequality?

Economic Letter | Posted October 19, 2020

FedViews: October 8, 2020

FedViews | Posted October 8, 2020

FedViews: September 3, 2020

FedViews | Posted September 3, 2020

Monitoring the Inflationary Effects of COVID-19

Economic Letter | Posted August 24, 2020

Average-Inflation Targeting and the Effective Lower Bound

Economic Letter | Posted August 10, 2020

FedViews: July 9, 2020

FedViews | Posted July 9, 2020

We Can’t Afford Not To

Economic Letter | Posted June 15, 2020

FedViews: May 28, 2020

FedViews | Posted May 28, 2020

Coronavirus and the Risk of Deflation

Economic Letter | Posted May 11, 2020

Mitigating COVID-19 Effects with Conventional Monetary Policy

Economic Letter | Posted April 13, 2020

FedViews: April 6, 2020

FedViews | Posted April 2, 2020

The Uncertainty Channel of the Coronavirus

Economic Letter | Posted March 30, 2020

FedViews: March 5, 2020

FedViews | Posted March 5, 2020

Why Is Unemployment Currently So Low?

Economic Letter | Posted March 2, 2020

Is the Risk of the Lower Bound Reducing Inflation?

Economic Letter | Posted February 24, 2020

The New Stone Soup

Economic Letter | Posted February 18, 2020

FedViews: January 9, 2020

FedViews | Posted January 13, 2020