ECRI Future Inflation Gauge (FIG) Versus Fed Funds Rate

Since Alan Greenspan became Fed Chairman in 1987 the ECRI's Future Inflation Gauge (FIG) has been a very reliable leading indicator of changes in the Federal Reserve's monetary policy. In fact, from 1987 onwards every change in the overall direction of official US interest rates (from rising to falling and vice versa) has been signaled by a turning point in the FIG. Below are two charts, the first showing the FIG / Fed Funds relationship from 1995 through to the present day (which we update monthly) and the second covering the period from January 1988 to March 2000.