Inflation & Prices
Cleveland Fed Says Its Inflation Forecast Is More Accurate Than Others
- Research finds nowcasts more accurate than alternative models
- Nowcast readings for CPI and PCE are updated each business day
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The Federal Reserve Bank of Cleveland’s model for forecasting near-term inflation readings has been more accurate at predicting price pressures during the pandemic than the various alternatives, according to new research from the bank.
The Cleveland Fed’s “nowcast” estimates of inflation measures are updated each business day and include projections for headline and core measures for the consumer price index and the price index for personal consumption expenditures. The researchers analyzed the accuracy of the model from the second quarter of 1999 to the fourth quarter of 2022 and for a shorter period since the start of the Covid-19 pandemic.