Sticky CPI
Sticky CPI is an Atlanta Fed measure that aggregates the CPI categories whose prices change infrequently, providing a cleaner read on the persistence of inflation than headline or core measures.
The macro regime is unambiguously STAGFLATION DEEPENING. The hot CPI print (pending event, 24h ago) is not a surprise — it is a CONFIRMATION of the pipeline signals that have been building for weeks: PPI accelerating faster than CPI, Cleveland nowcast at 5.28%, breakevens rising +10bp 1M across the …
What Is Sticky CPI?
Sticky CPI is an Atlanta Fed measure that aggregates the components of the consumer price index whose prices change infrequently. The methodology assigns each CPI item to either a "sticky" or "flexible" basket based on the average frequency of price changes in scanner data. Sticky items reprice on average every 4.3 months or less frequently; flexible items reprice more often.
The Atlanta Fed publishes sticky CPI on its Inflation Project page alongside flexible CPI. Sticky CPI ex-shelter is also published as a sub-measure that strips out the housing dynamics that dominate the broader sticky basket.
Why It Matters for Markets
Sticky CPI is a measure of inflation persistence. Flexible prices oscillate around their long-run trend in response to short-term shocks; sticky prices move slowly but reflect entrenched pricing decisions. When sticky CPI moves above its long-run average, it signals that inflation has become embedded in service contracts, insurance pricing, regulated tariffs, and other slow-moving categories that take quarters to reverse.
Fed officials and Fed-watchers reference sticky CPI alongside core PCE and super-core measures. When sticky CPI decelerates, it is a credible signal that disinflation is broad-based and persistent rather than narrow and transitory. Markets that watch sticky CPI alongside the headline measures get an earlier read on whether the inflation cycle is genuinely turning.
How to Read the Print
Sticky vs flexible CPI gap. A persistent gap (sticky higher than flexible) signals that inflation is embedded in the slow-moving categories and will take time to unwind. A converging gap with both decelerating is the canonical sign that the cycle is turning.
Sticky CPI ex-shelter. Removes the housing dynamics that lag real-time rent indices. This sub-measure has been more responsive to wage and labour-market dynamics than the full sticky basket.
3-month annualised rate. As with all inflation measures, the high-frequency rate flags turning points before the year-over-year reading reflects them.
Historical Context
Sticky CPI peaked at 6.7% YoY in late 2022. The 2010-2019 average was approximately 2.4%. By 2024-2025 it had decelerated to roughly 3.5%, still well above its 2010s norm but trending in the right direction.
Sticky CPI ex-shelter is generally a more useful real-time gauge for policy purposes because it removes the rent-lease lag that distorts the broader sticky measure. The two readings have converged through 2024-2025 as shelter inflation has finally caught down to the real-time signal.
Frequently Asked Questions
▶What is the difference between sticky and flexible CPI?
▶Why does sticky CPI matter for Fed policy?
▶What sticky CPI level signals the Fed is winning?
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