What Do Consumers Think Will Happen to Inflation?

Olivier Armantier, Fatima Boumahdi, Gizem Kosar, Jason Somerville, Giorgio Topa, Wilbert van der Klaauw and John Williams

No 20220526, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: This post provides an update on two earlier blog posts (here and here) in which we discuss how consumers’ views about future inflation have evolved in a continually changing economic environment. Using data from the New York Fed’s Survey of Consumer Expectations (SCE), we show that while short-term inflation expectations have continued to trend upward, medium-term inflation expectations appear to have reached a plateau over the past few months, and longer-term inflation expectations have remained remarkably stable. Not surprisingly given recent movements in consumer prices, we find that most respondents agree that inflation will remain high over the next year. In contrast, and somewhat surprisingly, there is a divergence in consumers’ medium-term inflation expectations, in the sense that we observe a simultaneous increase in both the share of respondents who expect high inflation and the share of respondents who expect low inflation (and even deflation) three years from now. Finally, we show that individual consumers have become more uncertain about what inflation will be in the near future. However, in contrast to the pre-pandemic period, they tend to express less uncertainty about inflation further in the future.

Keywords: inflation; expectations (search for similar items in EconPapers)
JEL-codes: D84 E31 (search for similar items in EconPapers)
Date: 2022-05-26
New Economics Papers: this item is included in nep-mac and nep-mon
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://libertystreeteconomics.newyorkfed.org/2022 ... happen-to-inflation/ Full text (text/html)
https://www.newyorkfed.org/research/medialibrary/m ... tions_armantier_data Chart data (application/vnd.ms-excel)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fednls:94274

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Liberty Street Economics from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().