Inflation, Salience, and Analyst Forecast

Rajesh Kumar Sinha

Journal of Behavioral Finance, 2025, vol. 26, issue 2, 215-228

Abstract: In this article, I examine whether a behavioral salience bias can explain analysts’ underreaction to inflation. Using a sample of U.S. analysts, I found that analysts incorporate both expected and unexpected inflation in their earnings forecasts when forecasts are more salient. I further found that efficient earnings forecast is a dominant channel that affects the inclusion of inflation in analysts’ earnings forecasts.

Date: 2025
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DOI: 10.1080/15427560.2023.2274332

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