So if the Fed raises interest rates, how much and how soon will that help inflation? For another project, I went back to Valerie Ramey's classic review. Here is her replication and update of two classic estimates {charts} The left side tells us what the federal funds rate typically does after the Fed raises it. The right shows the effect of the rate rise on the level of the CPI. Inflation is the slope of the curve. The horizontal axis is quarters. The top panel uses a vector autoregression. The bottom panel uses the Romer and Romer reading of the Fed minutes to isolate a monetary policy shock. Top pane (VAR): ... (full story)