Following significant inflation shocks, inflation expectations among Americans have reportedly risen, according to surveys and market measures. Although current data does not indicate an impending crisis, concerns persist, particularly regarding rising consumer prices like eggs. This trend could politically affect President Trump, whose campaign focused on controlling inflation. Economists emphasize the importance of managing inflation expectations to prevent a self-fulfilling cycle of rising wages and prices, complicating the Federal Reserve's efforts to maintain inflation at the target rate of 2%.
We don't want inflation expectations moving up so much that it makes the Fed's job harder to get inflation back to 2 percent.
Keeping inflation expectations in check is crucial to controlling inflation itself: beliefs about where prices are headed can become a self-fulfilling prophecy.
Collection
[
|
...
]