As economist Milton Friedman once quipped, monetary policy has a history of operating with “long and variable lags.” What Friedman was expressing is that it takes some time for the true effects of monetary policy, like the changing of the federal funds rate, to permeate completely through the larger economy. While some industries, like housing, are extremely rate-sensitive, there are others that are less so. Given the current inflation challenge, the question then becomes: how does monetary policy affect inflation across a diverse economy like the United States? This was the question that Leila Bengali and Zoe Arnaut, researchers at the Federal Reserve Board of San Francisco, asked. …The economists examined which components that make up the Personal Consumption Expenditures (PCE) Index, an inflation measurement produced by the Bureau of Economic Analysis, are the most and least responsive to changes in the federal funds rate.