Journal Article

The Likelihood of 2 Percent Inflation in the Next Three Years

Abstract: This Commentary examines inflation forecasts generated from a range of statistical models that historically have performed well at forecasting inflation. For each model, we look at the most likely future forecast path and the distribution of forecasts around that path. We show that the models project generally rising inflation, but, in contrast to other forecasts, five out of six models assign a less than 50 percent probability to inflation?s being 2 percent or higher over the next three years.

Keywords: forecasts; inflation; models;

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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2016

Issue: November

Order Number: 14