Jerome Powell. Photo: Win McNamee/Getty Images

More research is beginning to show that controlling inflation is quite complicated, WSJ's Paul Kiernan writes.

What's happening: "Recent studies have shown prices in some sectors—such as housing—do indeed rise faster when growth is in full swing, unemployment low and markets frothy. But a large chunk of the economy, from health care to durable goods, appears insensitive to rising or falling demand," Kiernan says.

  • It's not just those sectors. "Prices accounting for nearly half of the Fed’s preferred inflation gauge, the personal-consumption-expenditures price index, don’t respond to changes in economic activity," according to a recent paper from economists at Harvard and Princeton.

Why it matters: "The Fed influences inflation by lowering rates to spur demand or raising them to curb it. The new research suggests that to lift overall inflation the Fed may have to stimulate larger price increases in sectors where the Phillips curve still exists to compensate for subdued inflation in those where it doesn’t,” according to the WSJ.

  • "Lately, it’s been a losing battle."

Go deeper

Dion Rabouin, author of Markets
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Data: Hamilton Place Strategies, CivicScience; Chart: Axios Visuals

The rise in coronavirus cases in certain parts of the U.S. is stunting confidence across the country, a crop of new reports show.

Driving the news: After stalling during the previous two-week period, overall economic sentiment declined for the first time in two months, according to the Economic Sentiment Index, a biweekly survey from data firm CivicScience and Hamilton Place Strategies (HPS).

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Politics: Obama: Trump is "jealous of COVID's media coverage."
  2. Health: Mask mandates help control the rise in coronavirus hospitalizations. Hospitals face a crush.
  3. Business: Coronavirus testing is a windfall. Winter threat spurs new surge of startup activity.
  4. Media: Pandemic causes TV providers to lose the most subscribers ever.
  5. World: Putin mandates face masks.

The GOP's monstrous math problem

Illustration: Sarah Grillo/Axios

Republicans, win or lose next week, face a big — and growing — math problem.

The state of play: They're relying almost exclusively on a shrinking demographic (white men), living in shrinking areas (small, rural towns), creating a reliance on people with shrinking incomes (white workers without college degrees) to survive.

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