68 posts on "inflation"
February 17, 2026
Seeing Through the Shutdown’s Missing Inflation Data
Data releases for inflation have been scarce over the past four months due to the government shutdown. As a result, until January 22 no personal consumer expenditures (PCE) data were available beyond September and the consumer price index (CPI) had many missing entries for the one-month changes for October and November. In this post, we use an extended version of the New York Fed’s Multivariate Core Trend (MCT) inflation model to examine changes in underlying inflation over this period. The MCT model is well-suited to do so because it decomposes sectoral inflation rates into a trend (“persistent”) and a transitory component. In contrast to core (ex-food and energy) inflation, its aim is to remove all transitory factors, thus identifying the underlying trend. In addition, since the model can handle missing data—like for October—it can produce values for trend inflation for months where little or no data were released. Our findings suggest caution: while the fragmented data from November initially signaled a deceleration in price pressures, the integration of December data indicates that these reductions were largely transitory. Once the full data set is used, the aggregate trend for December stands at 2.83 percent, an increase from 2.55 percent in September.
February 12, 2026
Who Is Paying for the 2025 U.S. Tariffs?
Over the course of 2025, the average tariff rate on U.S. imports increased from 2.6 to 13 percent. In this blog post, we ask how much of the tariffs were paid by the U.S., using import data through November 2025. We find that nearly 90 percent of the tariffs’ economic burden fell on U.S. firms and consumers.
February 5, 2026
Does the Phillips Curve Steepen When Costs Surge?
Inflation does not always respond to cost and demand pressures in the same way. When shocks are small, the mapping from costs to prices is roughly proportional—double the shock, double the inflation response. But when the economy is hit by large shocks, this proportionality breaks down. As the recent surge and subsequent decline of global inflation showed, price growth can accelerate—or decelerate—by more than one-for-one relative to the size of the disturbance. Economists refer to this pattern as nonlinear inflation dynamics. In this post, I discuss what these nonlinearities mean, how they relate to the slope of the Phillips curve discussed in a companion post, and how firm-level data can help us understand the mechanisms behind them.
February 4, 2026
Anatomy (not Autopsy) of the Phillips Curve
The relationship between inflation and real economic activity has long been central to debates in macroeconomics and monetary policy. At the core of this debate is the Phillips curve (PC), which measures how strongly inflation reacts to movements in economic conditions. The steepness of this curve matters enormously for monetary policy: if the PC is steeper, inflation rises faster during booms and falls faster in recessions, which entails central banks having to act more forcefully if they want to stabilize inflation around their target. Prior analysis found astonishingly small estimates of the slope of the PC, which suggests that the curve is “flat” (or even dead). In this post, I present evidence from coauthored research showing that, contrary to the conventional view, the Phillips curve is alive and steep, and it captures inflation volatility remarkably well once real marginal cost is used instead of standard real economic activity measures.
January 14, 2026
Understating Rising Quality Means Import Price Inflation Is Overstated
It is common for price measures to consider changes in quality. That is, a price index might fall even though listed prices are unchanged because the quality of the item has improved. An adjustment for quality captures the fact that consumers are effectively getting more for the same dollar when product quality rises. In practice, however, it is notoriously difficult to measure quality changes since it requires access to detailed data on all product characteristics that matter to consumers. We offer a novel method to infer quality changes and apply it to U.S. import price indices. When we account for quality improvements in this way, we find that the import price inflation based on official measures has been overstated, revealing that consumers have been getting more from their purchases of imported goods than what standard quality adjustments suggest.
March 21, 2025
The New York Fed DSGE Model Forecast—March 2025
This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since December 2024. As usual, we wish to remind our readers that the DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process. For more information about the model and variables discussed here, see our DSGE model Q & A.
March 5, 2025
Firms’ Inflation Expectations Have Picked Up
Editors note: Since this post was published, we clarified language in the first paragraph about year-ahead expectations for manufacturing and service firms in the 2025 survey. We also corrected the y-axis range of Chart 2. (March 5, 11 a.m.)
After a period of particularly high inflation following the pandemic recession, inflationary pressures have been moderating the past few years. Indeed, the inflation rate as measured by the consumer price index has come down from a peak of 9.1 percent in the summer of 2022 to 3 percent at the beginning of 2025. The New York Fed asked regional businesses about their own cost and price increases in February, as well as their expectations for future inflation. Service firms reported that business cost and selling price increases continued to moderate through 2024, while manufacturing firms reported some pickup in cost increases but not price increases. Looking ahead, firms expect both cost and price increases to move higher in 2025. Moreover, year-ahead inflation expectations have risen from 3 percent last year at this time to 3.5 among manufacturing firms and 4 percent among service firms, though longer-term inflation expectations remain anchored at around 3 percent.
February 28, 2025
Kartik Athreya on His First Year as Research Director of the New York Fed
A year has passed since Kartik Athreya became director of research at the New York Fed. To get some perspective on his experience thus far, we caught up with Kartik and asked about his views on economics, the role of Research at the Bank, and his take on a few of the hot topics of the day.
February 27, 2025
Supply and Demand Drivers of Global Inflation Trends
Our previous post identified strong global components in the slow-moving and persistent dynamics of headline consumer price index (CPI) inflation in the U.S. and abroad. We labeled these global components as the Global Inflation Trend (GIT), the Core Goods Global Inflation Trend (CG-GIT) and the Food & Energy Global Inflation Trend (FE-GIT). In this post we offer a narrative of the drivers of these global inflation trends in terms of shocks that induce a trade-off for monetary policy, versus those that do not. We show that most of the surge in the persistent component of inflation across countries is accounted for by global supply shocks—that is, shocks that induce a trade-off for central banks between their objectives of output and inflation stabilization. Global demand shocks have become more prevalent since 2022. However, had central banks tried to fully offset the inflationary pressures due to sustained demand, this would have resulted in a much more severe global economic contraction.
Global Trends in U.S. Inflation Dynamics
A key feature of the post-pandemic inflation surge was the strong correlation among inflation rates across sectors in the United States. This phenomenon, however, was not confined to the U.S. economy, as similar inflationary pressures have emerged in other advanced economies. As generalized as the inflation surge was, so was its decline from the mid-2022 peak. This post explores the common features of inflation patterns in the U.S. and abroad using an extension of the Multivariate Core Trend (MCT) Inflation model, our underlying inflation tracker for the U.S. The Global MCT model purges transitory noise from international sectoral inflation data and quantifies the covariation of their persistent components—in the form of global inflation trends—along both country and sectoral dimensions. We find that global trends play a dominant role in determining the slow-moving and persistent dynamics of headline consumer price index (CPI) inflation in the U.S. and abroad, both over the pre-pandemic and post pandemic samples.
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