In today's economic landscape, understanding the importance of inflation expectations is valuable for everyone—from everyday consumers to business owners and policymakers.
Inflation expectations are what people think will happen to prices for goods and services in the future. This Fed Talk aims to demystify this concept.
Expectations about inflation matter because they play a critical role in economic decision-making which, in turn, will influence actual inflation. For example, if consumers expect higher inflation, they may spend more now. If businesses expect higher costs, they may raise prices preemptively. Both actions can contribute to higher inflation.
Because we cannot directly observe inflation expectations, we use various methods to measure them. These methods include surveys, forecasts, and inflation-related financial instruments.
October's Fed Talk will highlight the relationship between expected and actual inflation. Our panelists will also be discussing:
Speakers will include economists from the Federal Reserve Bank of Cleveland's Center for Inflation Research. The Center is a leading resource to better understand all aspects of inflation through the availability of research, indicators, and educational tools.
Following the presentation, speakers will take questions from the audience.
