What Do Financial Officers Predict for Price Growth?

Fried, Stephie; Graf, Tobin; Malhotra, Simar; Singh, Sanjay R.

Journal Article

What Do Financial Officers Predict for Price Growth?

Abstract: Survey responses from chief financial officers and other financial decisionmakers yield a new measure of inflation expectations. Rather than asking about expectations for overall inflation, this survey asks about expected price growth at each respondent’s business. Aggregating survey responses provides an economy-wide indicator that tracks well with actual core consumer price index inflation. Survey responses collected before and during the recent oil shock imply that core inflation could remain elevated this year if the historical relationship between financial officer expectations and realized core inflation persist.