Year-Ahead CPI Inflation Expectations in January: 3%-3.3%

From Michigan, NY Fed, and Atlanta Fed SoFIE:

Figure 1: Year-on-Year CPI inflation (bold black), Cleveland y/y nowcast as of 2/11 (black +), Michigan Survey of Consumers (red), NY Fed (blue), Survey of Firms Inflation Expectations (sky blue), all in %. Michigan January reading is preliminary. Source: BLS, Cleveland Fed, Michigan Survey of Consumers via FRED, NY Fed, Cleveland Fed.

The NY Fed survey shows remarkable consistency, while Michigan survey has shown a marked upward swing in the last two months (although the last observation is preliminary). The three readings range between 3% (NY Fed) to 3.3% (Michigan preliminary). The Cleveland Fed inflation expectations for January, based on survey and market data is at 2.6% as of mid-January.

My guess on the CPI equivalent to 2% PCE inflation is 2.45%. In this interpretation, inflation expectations are still about 0.5 to 0.8% above target.

 

 

2 thoughts on “Year-Ahead CPI Inflation Expectations in January: 3%-3.3%”

  1. Chuck Soder

    Hello Menzie! So you know, SoFIE is a Cleveland Fed product, not Atlanta (the link you provided is correct)

    1. Menzie Chinn Post author

      Chuck Soder: Apologies! My error – should have remembered, have been citing Candia-Coibion-Gorodnichenko since before it arrived at Cleveland Fed. Now fixed. Thanks for bringing to my attention.

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