Weekly Viz 2022-08-08
US Federal Funds Effective Rate VS. CPI
Fund has been rasing interest rate this year as an reaction to the hiking inflation. This week, I found the Federal Funds Effective Rate and Sticky Price Consumer Price Index less Food and Energy (CPI) since 1968 on Fred Economic Data, and plot them together to see how they move together.
My Visualization
The visualization is very starightforward – two line charts on top each other.
Please notice that all the visualizations are designed for desktop view, so it is recommended to view them on a desktop device.
Insights
- Interest rate and CPI appear to have strong correlation as we expected. As Investopedia says “In general, higher interest rates are a policy response to rising inflation. Conversely, when inflation is falling and economic growth slowing, central banks may lower interest rates to stimulate the economy.”
- Current CPI is at all-time high since 1990, but interest rate is still at a relatively lower level in history.
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