Journal Article
On the Relative Performance of Inflation Forecasts
Bennett, Julie; Owyang, Michael T. (2022)
Inflation expectations constitute important components of macroeconomic models and monetary policy rules. We investigate the relative performance of consumer, professional, market-based, and model-based inflation forecasts. Consistent with the previous literature, professional forecasts most accurately predict one-year-ahead year-over-year inflation. Both consumers and professionals overestimate inflation over their respective sample periods. Market-based forecasts as measured by the swap market breakeven inflation rates significantly overestimate actual inflation; Treasury ...
Review , Volume 104 , Issue 2 , Pages 131-148

Journal Article
What’s the Best Measure of Economic Slack?
Barnichon, Regis; Shapiro, Adam Hale (2022-02-22)
Different ways of measuring the economy’s unused capacity, or slack, can result in varying inflation forecasts. Estimates suggest that direct measures of labor market tightness, such as the ratio of job vacancies to unemployment or the rate of employee job switching, provide more accurate forecasts than commonly used measures, such as the unemployment rate or the output gap. Recent elevated values of these measures of labor market tightness suggest greater inflation pressure than is implied by the unemployment rate alone.
FRBSF Economic Letter , Volume 2022 , Issue 04 , Pages 05