Palanor: Inflation Pulse

Overview

Palanor: Inflation Pulse is a single 0–100 read of inflation pressure relative to the 2% target. High readings indicate prices, expectations, and nowcasts are running hot above target; low readings indicate disinflation or outright disinflationary risk.

Why these components

Sticky CPI carries the highest weight because sticky prices change slowly and reflect persistent — not transitory — inflation. Core CPI and PCE are the standard headline reads, with PCE getting the slightly lower weight because it is the Fed's preferred gauge already represented elsewhere. Market-based breakevens (5Y and 10Y) read expectations rather than realized prices — they often turn first. The Cleveland Fed model nowcast adds a model-based forward view. The Google Trends inflation term is the public-attention proxy.

Methodology

Level series are recentered against the 2% target (so a 2.0 reads as neutral, 4.0 as elevated, 0.5 as undershoot). The PCE deflator and core CPI use 12-month percent change because they are index levels. Each component is z-normalized after that transformation. The weighted sum maps through a logistic to 0–100. Missing components renormalize.

Interpretation

Readings above 65 indicate an inflation regime running materially above target — the kind in which the Fed is reactive and real yields stay positive. Readings below 35 indicate an undershoot or disinflationary risk regime. The most informative reading is divergence between sticky CPI (slow-moving, persistent) and the breakevens (fast, expectations-led): persistent disagreement signals a regime transition.

Caveats

This is a market- and survey-priced inflation read, not a real-time price observation. It will lag a true regime change by weeks. Breakeven readings are notoriously sensitive to TIPS liquidity, especially at the long end.

Components & Weights

Every component, every weight. The 30-day spark shows how the underlying series has moved; the transform column shows how it converts to a comparable scale before weighting. Direction indicates whether rising values raise or lower the index.

Historical

24-month history of this index. The composite is recomputed daily; values are stored with timestamps.

References

• FRED — Federal Reserve Economic Data, St. Louis Fed. https://fred.stlouisfed.org/
• Atlanta Fed — Wage Growth Tracker and Sticky-Price CPI. https://www.atlantafed.org/research
• Cleveland Fed — Model-based inflation expectations. https://www.clevelandfed.org/our-research/indicators-and-data
• OECD — Composite Consumer Confidence Indicator. https://data.oecd.org/leadind/consumer-confidence-index-cci.htm
• CNN Business — Fear & Greed Index. https://www.cnn.com/markets/fear-and-greed
• Google Trends — interest over time. https://trends.google.com/