Transmission Price Index ™
Five-channel inflation pressure decomposition with 12-month directional forecast
By Ceraluna Labs • Work in Progress
TPI separates consumer-price pressure into the channels through which monetary policy, housing markets, goods trade, and labour costs transmit into the prices households actually pay. Each channel is weighted by its empirical contribution to CPI dynamics, producing a single composite reading in annualised percentage-point units, directly comparable to headline and core CPI.
TPI (latest)
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Core CPI YoY
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BLS, smoothed
TPI vs Core
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12m forecast
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Trend extrapolation
Horizon
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12 months ahead
TPI Composite & Block Contributions
TPI decomposes consumer-price pressure into five macro-transmission channels and recombines them into a single reading scaled to annualised CPI-equivalent units.
Construction
- Each block is computed as a z-score of its underlying signal relative to the full sample history.
- Blocks are combined using fixed transmission weights (40/20/15/15/10) derived from the relative CPI expenditure shares and transmission lag structure documented in the economics literature.
- The composite is anchored to the long-run core CPI mean and scaled by core CPI standard deviation, producing a reading in familiar annualised percentage-point units.
How to read it
- When TPI rises above core CPI (dashed yellow), the transmission channels are signalling building pressure not yet reflected in the official print.
- Housing pipeline (orange) leads by 12-18 months: home-price growth that hasn't yet flowed into official shelter CPI.
- Money pressure (rose) activates mainly in unusual monetary regimes: large positive or negative real M2 growth relative to CPI.
Limitations
- TPI is a decomposition and leading-indicator framework. In honest pseudo-out-of-sample backtests, the composite did not beat core CPI on RMSE as a standalone point forecast.
- The 12-month forecast uses trend extrapolation with mean-reversion damping: directional guidance, not a structural model.
- Block weights are fixed heuristic values. A regime-adaptive version is under development.
CPI & M2 Money Supply (YoY %)
Classical monetary context: headline CPI inflation (left axis) overlaid with broad money growth (right axis). The lag between M2 expansion and consumer-price response is a key input to the TPI money-pressure channel.
Latest Block Contributions
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Contributions in percentage points relative to the long-run core CPI mean. Positive = upward pressure; negative = downward pressure.
Transmission Channels
Trend Core (40%)
3-month smoothed core CPI YoY: the persistent inflation trend, stripped of transitory noise
Housing Pipeline (20%)
Home-price growth (lagged 12 months) minus official shelter CPI: captures the well-documented rent pipeline lag
Goods Pipeline (15%)
Headline CPI minus core CPI: isolates food, energy, and tradeable goods pressure
Services Pressure (15%)
Shelter CPI minus core CPI: tracks above-core services momentum and wage pass-through
Money Pressure (10%)
Real M2 growth (M2 YoY minus headline CPI YoY): monetary regime signal, strongest in high-inflation episodes
Iran/Hormuz oil shock scenarios
Baseline ($110 Brent, current spot) plus moderate ($125) and extreme ($150) oil-price paths feeding into the Transmission Price Index forecast. Calibrated to Fed Board (2023) pass-through elasticities with distributed lags.
Citations & Sources
Data as of — • Accessed 2026-03-09
Data Sources
How to Cite
Koziol, T. (2026). “Transmission Price Index (TPI): A Five-Channel Decomposition of U.S. Consumer-Price Pressure.” Bubble Tracker, Work in Progress. bubble-tracker.com/twpdi. Accessed 2026-03-09.
If you use TPI readings, charts, or derived insights in an article, paper, dashboard, or report, please cite the author and link back to this page. Screenshots are welcome with attribution.
Attribution & Reuse
- When quoting or reproducing a figure, include both Bubble Tracker and the original upstream data source(s) listed above.
- For programmatic access (CSV/API), redistribution, or commercial use, please contact us.