Core inflation not best predictor of price movements: Philly Fed paper

federal-reserve

A Philadelphia Federal Reserve paper published on Thursday finds little support for the assumption that core inflation is a better predictor of total inflation over longer time horizons.

Theodore Crone, Neil Khettry, Loretta Mester and Jason Nova, the paper's authors, measured core and headline PCE inflation in the US across four forecasting horizons to examine which measure of inflation yields a better prediction of future inflation.

The results shows total PCE inflation tends to outperform

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