Source: Federal Reserve Bank of Chicago staff analysis, reproduced with permission. Log levels of GDP and nonfarm payroll employment and the 12−month change in core personal consumption expenditures (PCE) prices. Recent data are quarterly since 2021: Q4 for GDP and monthly since November 2021 for employment and core PCE inflation.
2.0
2.3
2.9
3.7
4.4
4.3
4.1
3.9
3.5
3.0
2.4
1.9
3.9
4.0
4.2
4.2
The gray line in each panel represents historical evolution of the economy during prior episodes of rising policy rates. The blue line represents the actual data in the current cycle. Differences in the historical trend versus the current data highlight a different economic response this time.
Monetary Policy Responses and Recent Data