🚀 FRED Regression Example

A minimal Python script to:

• Fetch FEDFUNDS and CPIAUCSL data from the FRED API
• Perform a linear regression: CPI ~ FEDFUNDS
• Save results and visualize the trend line

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🔧 Setup

1. Python 3.10 or newer

2. Install dependencies:

   pip install --upgrade pip
   pip install pandas pandas_datareader statsmodels matplotlib

3. Configure your FRED API Key:

   • Windows CMD:

     set FRED_API_KEY=YOUR_KEY

   • PowerShell:

     $Env:FRED_API_KEY="YOUR_KEY"

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▶️ Usage

Clone the repo and run:

python fred_regression_example.py

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🗂️ Outputs

File	Description
regression_summary.txt	Detailed regression summary output
cpi_vs_fedfunds.png	Scatter plot with regression line

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📈 Quick Interpretation

Regression Results

• Dependent: CPI (Consumer Price Index)
• Independent: FEDFUNDS (Effective Federal Funds Rate)
• R²: ~0.002 → explains only 0.2% of CPI variation
• Coefficient: ~-0.15 (p > 0.05) → not statistically significant
• Intercept: ~230 (p < 0.001)
• Conclusion: Limited direct linear impact; other macro factors likely drive CPI changes

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📜 License

This project is licensed under the MIT License.