Consumer inflation views in three countries

Maura Lynch and Bharat Trehan ()

FRBSF Economic Letter, 2013, issue nov25

Abstract: Financial markets and professional forecasters expect central banks to hit their inflation targets. But U.S., British, and Japanese consumers expect inflation to be higher. Data suggest that consumers in these countries don?t pay attention to central bank inflation targets and react sluggishly to persistent shifts in the inflation rate. However, the price of oil apparently influences inflation expectations strongly. It?s possible that consumers use highly volatile oil prices in a rule of thumb for updating their inflation expectations.

Keywords: Inflation (Finance); Petroleum products - Prices (search for similar items in EconPapers)
Date: 2013
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