Inflation Expectations in the U.S.: Linking Markets, Households, and Businesses
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Summary:
Inflation has been below the Federal Reserve’s target for much of the past 20 years, creating worries that inflation may be deanchoring from the FOMC’s target. This paper uses a factor model that incorporates information from professional forecasters, household and business surveys, and the market for Treasury inflation protected securities (TIPS) to estimate long-run inflation expectations. These have fallen notably in the past few years (to roughly 1.9 percent for CPI inflation, well below the FOMC’s target). It appears that, even before the covid recession, the private sector viewed the economy as likely to suffer from persistent headwinds to inflation.
Series:
Working Paper No. 2020/240
Subject:
Asset and liability management Inflation Inflation targeting Liquidity Monetary policy National accounts Oil prices Prices Return on investment
Frequency:
regular
English
Publication Date:
November 13, 2020
ISBN/ISSN:
9781513561158/1018-5941
Stock No:
WPIEA2020240
Pages:
25
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