Economists from the Federal Reserve Bank of Chicago predict inflation will cool without a recession.
"That model implies larger effects of monetary policy and faster policy transmission than other empirical models," the economists said.
So far, based on the analysis, tighter policy has resulted in 5.4 percentage points in the level of real GDP and 7.1 percentage points in CPI.
That represents about 65% and 75% of the total tightening effects on the levels of real GDP and CPI, respectively, that will occur, according to the model.
Policy has reduced total hours worked by about 4 percentage points, or about 40% of the total effect that is ultimately projected.
Persons:
Stefania D'Amico, Thomas King, D'Amico, King, Henry Blodget
Organizations:
Federal Reserve Bank of Chicago, Service, Consumer, Index, CPI
Locations:
Wall, Silicon