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
Supply- and Demand-Driven PCE Inflation
Key Inflation Content (and how Monetary Policy seeks to address it)
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 |
Finding a Way to Measure How Tight Monetary Policy Is
SF Fed Blog |
FedViews |
Oil Shocks when Interest Rates Are at the Zero Lower Bound
Economic Letter |
Resolute and Mindful: The Path to Price Stability
Economic Letter |
Can the News Drive Inflation Expectations?
Economic Letter |
How Is Inflation Affecting Our Paychecks? Watch Our Latest Tutorial Video
SF Fed Blog |
FedViews |
Comparing Measures of Housing Inflation
Economic Letter |
SF Fed Blog |
What If? Monetary Policy in Hindsight
Economic Letter |
The Singularity of the Dual Mandate
Economic Letter |
Remote Work and Housing Demand
Economic Letter |
Charting New Stories with SF Fed Data Explorer
SF Fed Blog |
FedViews |
Wage Growth When Inflation Is High
Economic Letter |
Will Workers Demand Cost-of-Living Adjustments?
Economic Letter |
COVID-19 Fiscal Expansion and Inflation Expectations in Japan
Economic Letter |
FedViews |
The Increase in Inflation Compensation: What’s Up?
Economic Letter |
Policy Nimbleness Through Forward Guidance
Economic Letter |
How Much Do Supply and Demand Drive Inflation?
Economic Letter |
60-Second Explainer: How the Fed is Working to Lower Inflation
SF Fed Blog |
FedViews |
Estimating Natural Rates of Unemployment
Economic Letter |
Watch FOMC Rewind Live, May 2022 – Insights on Fed Policy Announcements
SF Fed Blog |
Untangling Persistent versus Transitory Shocks to Inflation
Economic Letter |
Current Recession Risk According to the Yield Curve
Economic Letter |
Steering Toward Sustainable Growth
Economic Letter |
FedViews |
Watch FOMC Rewind Live—Conversations Breaking Down Fed Policy Announcements
SF Fed Blog |
Watch: Will Rising Rents Push Up Future Inflation?
SF Fed Blog |
Why Is U.S. Inflation Higher than in Other Countries?
Economic Letter |
Beyond the Numbers: Inflation Concerns in the Federal Reserve’s Twelfth District
SF Fed Blog |
This Time Is Different…Because We Are
Economic Letter |
What’s the Best Measure of Economic Slack?
Economic Letter |
Will Rising Rents Push Up Future Inflation?
Economic Letter |
FedViews |
FedViews |
Average Inflation Targeting in the Financial Crisis Recovery
Economic Letter |
FedViews |
Policymaking in a Time of Uncertainty
Economic Letter |
Is the American Rescue Plan Taking Us Back to the ’60s?
Economic Letter |
FedViews |
FedViews |
Return of the Original Phillips Curve
Economic Letter |
FedViews |
Do Households Expect Inflation When Commodities Surge?
Economic Letter |
FedViews |
Fiscal Multiplier at the Zero Bound: Evidence from Japan
Economic Letter |
FedViews |
Disagreement about U.S. and Euro-Area Inflation Forecasts
Economic Letter |
Lessons from History, Policy for Today
Economic Letter |
FedViews |
SF Fed Launches Tool to Forecast COVID-19 Infections by County
SF Fed Blog |
Can Government Spending Help to Escape Recessions?
Economic Letter |
FedViews |
The Asymmetric Costs of Misperceiving R-star
Economic Letter |
Economic Letter |
FedViews |
Is the Federal Reserve Contributing to Economic Inequality?
Economic Letter |
FedViews |
FedViews |
Monitoring the Inflationary Effects of COVID-19
Economic Letter |
Average-Inflation Targeting and the Effective Lower Bound
Economic Letter |
FedViews |
Economic Letter |
FedViews |
Coronavirus and the Risk of Deflation
Economic Letter |
Mitigating COVID-19 Effects with Conventional Monetary Policy
Economic Letter |
FedViews |
The Uncertainty Channel of the Coronavirus
Economic Letter |
FedViews |
Why Is Unemployment Currently So Low?
Economic Letter |
Is the Risk of the Lower Bound Reducing Inflation?
Economic Letter |
Economic Letter |
FedViews |