First, let's consider a supply shock that temporarily raises the price of energy by a large amount. In this case headline inflation will rise well above its underlying trend as the price of energy rises but will soon fall well below its underlying trend as the price of energy falls back to its initial level.
On average, inflation will remain unchanged without any monetary policy  2  These tests allow for a nonzero constant differential between headline and core inflation. The differential often turns out to be nontrivial and statistically significant.