Will High Underlying Inflation Persist?
Abstract: Underlying inflation—the rate of inflation that prevails after temporary imbalances in the economy are resolved—can help policymakers gauge whether current high rates of inflation are likely to persist. Using survey-based inflation expectations, we show that if current inflation forecasts are realized, underlying inflation should decline toward 2 percent in 2024. However, if inflation continues to surprise to the upside, underlying inflation may remain elevated for some time.
File(s): File format is application/pdf https://www.kansascityfed.org/Economic%20Bulletin/documents/9519/EconomicBulletin23LusompaSattiraju0510.pdf
Provider: Federal Reserve Bank of Kansas City
Part of Series: Economic Bulletin
Publication Date: 2023-05-10