Question: Economists sometimes exclude food and energy prices from the headline
Economists sometimes exclude food and energy prices from the “headline” consumer price index and use the resulting “core” price measure to assess inflation prospects. For the period since 1990, plot on one graph the percent change from a year ago of the consumer price index (FRED code: CPIAUCSL) and the percent change from a year ago of the consumer price index excluding food and energy (FRED code: CPILFESL) Visually compare the variability of these two measures of inflation. Why might ex-food-and-energy inflation be a better predictor of future inflation?
Answer to relevant QuestionsSuppose that a major foreign government defaults on its debt. What, if anything, will happen to the position and slope of the U.S. yield curve? Suppose that the yield curve shows that the one-year bond yield is 3 percent, the two-year yield is 4 percent, and the three-year yield is 5 percent. Assume that the risk premium on the one-year bond is zero, the risk ...If inflation and interest rates become more volatile, what would you expect to see happen to the slope of the yield curve?How reliably does an inverted yield curve anticipate a recession? How far in advance? Plot from 1970 (as in Figure) the difference between the 10-year Treasury yield (FRED code: GS10) and the three-month Treasury bill rate ...What are the advantages of holding stock in a company versus holding bonds issued by the same company?
Post your question