Journal Article

Disagreement among Households May Foreshadow a Rise in Inflation Expectations

Abstract: Households’ expectations about future inflation can influence realized inflation, so many policymakers track median household inflation expectations. However, the median changes slowly if households learn about economic fundamentals gradually. A widening distribution of household inflation expectations may foreshadow an increase in the median. During 2021, for example, disagreement about inflation expectations rose months before the median increased appreciably.

Keywords: Inflation; Households;

JEL Classification: E2;

Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Bulletin

Publication Date: 2022-06-29

Issue: June 29, 2022

Pages: 3