Consumer Vibe Check: Gas Prices and Inflation Expectations

Taerin Kim and Yeji Sung

FRBSF Economic Letter, 2026, vol. 5, issue 2026-24, 5

Abstract: According to household surveys, inflation expectations tend to move together with expectations for gasoline price changes. The relationship is not symmetrical, though: Inflation expectations rise when households revise up their outlook for gas price growth but change little when they revise it down. This pattern is strongest among lower-income and less-educated households. Analysis also suggests that increases in expected gas price growth are associated with greater perceived inflation uncertainty. However, quantitatively, the evidence suggests a moderate relationship between changes in expected gasoline prices and households’ inflation expectations.

Keywords: gas prices; inflation expectations; consumer vibes (search for similar items in EconPapers)
Date: 2026
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