Core PCE above the Fed's target
In every month core PCE inflation ran above the Fed's 2% target, what did the federal funds rate do over the following year?
9 windows met these conditions and completed 12 months. Federal Funds Rate was higher 12 months later in 4 of them and lower in 5. The middle half of outcomes fell between -1.19 and 0.13.
What followed, across 9 completed windows
- Higher after
- 4
- Lower after
- 5
- Middle half
- -1.19 to +0.13
- Full range
- -4.25 to +2.07
Change in Federal Funds Rate over the 12 months after each match. Windows are listed below so any one can be checked.
Term structure
Federal Funds Rate measured 1, 3, 6 and 12 months after each matched episode, with the count of completed windows at each horizon — not a forecast path, the same distribution above asked again at three more calendar distances.
| Horizon | N | Higher / lower | Middle half | Full range |
|---|---|---|---|---|
| 1m | 9 | 4 / 2 | 0 to +0.07 | -0.49 to +0.23 |
| 3m | 9 | 6 / 3 | -0.07 to +0.23 | -1.18 to +0.57 |
| 6m | 9 | 6 / 3 | -0.5 to +0.23 | -2.21 to +1.07 |
| 12m | 9 | 4 / 5 | -1.19 to +0.13 | -4.25 to +2.07 |
N is windows with a complete outcome at that horizon; a window that runs past the end of the record is excluded from it, not filled in. A horizon below the 5-window floor is marked thin the same way the 12 months result above is.
The conditions, in full
Generated from the same object that produced the numbers, so the description cannot drift from the computation.
- condition: PCEPILFE year-over-year above 2
- align: each condition is put onto the measured series' dates, taking the last observation on or before each, so windows and spans count in the measured series' own periods
- measure: FEDFUNDS over the following 12 observations
- matches within 3 observations count as one episode
Every matching window
9 episodes, each dated. Consecutive months meeting the conditions count once.
| Began | Ran for | Federal Funds Rate then | After | Change |
|---|---|---|---|---|
| Jan 1960 | 5 mo | 3.99 | 1.45 | -2.54 |
| Jun 1966 | 356 mo | 5.17 | 3.98 | -1.19 |
| Jan 2001 | 8 mo | 5.98 | 1.73 | -4.25 |
| Sep 2002 | 1 mo | 1.75 | 1.01 | -0.74 |
| Apr 2004 | 3 mo | 1 | 2.79 | +1.79 |
| Nov 2004 | 47 mo | 1.93 | 4 | +2.07 |
| Jan 2012 | 3 mo | 0.08 | 0.14 | +0.06 |
| Nov 2018 | 2 mo | 2.2 | 1.55 | -0.65 |
| Mar 2021 | 65 mo | 0.07 | 0.2 | +0.13 |
Recompute this
Fetch FEDFUNDS PCEPILFE from the API or from FRED, apply each condition on the same dates, collapse consecutive matches, and measure the change over the following 12 months. The full rule is in the claims ledger.
This page counts and dates. It does not say what will happen next, and no window above is presented as more likely than another — MacroRadar publishes historical indicators, never forecasts.