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Keywords:personal consumption expenditures (PCE) 

What Drives Changes in Inflation?

Examining the inflationary trends of key components of the PCE price index can help provide insight into recent movements in consumer prices.
On the Economy

Discussion Paper
How Much Will the Rise in Commodity Prices Reduce Discretionary Income?

Commodity prices have risen considerably since August 2010, raising concerns that higher commodity prices could reduce households’ discretionary income and slow the recovery. For example, as former Federal Reserve Board Vice Chairman Donald Kohn said in the Wall Street Journal last fall: “… the surge in international commodity prices. If that persists it could hurt Americans’ disposable income, especially as it is reflected in higher gas and energy prices.” Is that concern warranted?
Liberty Street Economics , Paper 20110323

Journal Article
Overshooting the Inflation Target

Although transitory factors have largely driven the recent rise in inflation, expansionary policy to relieve unusual economic conditions also played a role.
Economic Synopses , Issue 24 , Pages 1-3

Monetary Policy Challenges in the Pandemic Recovery

President Collins shared charts with graduate students and faculty at an economics seminar at Harvard University, covering aspects of the economy she recently discussed at Wellesley College and as part of the Boston Fed’s 22nd Annual Regional & Community Bankers Conference.

Discussion Paper
Inflation Persistence: Dissecting the News in January PCE Data

This post presents updated estimates of inflation persistence, following the release of personal consumption expenditure (PCE) price data for January 2023. The estimates are obtained by the Multivariate Core Trend (MCT), a model we introduced on Liberty Street Economics last year and covered most recently here and here. The MCT is a dynamic factor model estimated on monthly data for the seventeen major sectors of the PCE price index. It decomposes each sector’s inflation as the sum of a common trend, a sector-specific trend, a common transitory shock, and a sector-specific transitory shock. ...
Liberty Street Economics , Paper 20230309

Journal Article
Inflation, Part 2: How Do We Construct and Choose an Index?

Both the CPI and the PCE price indexes measure the prices of consumer goods and services— but they differ in important ways.
Economic Synopses , Issue 16 , Pages 1-3