Inflation Expectations and the Fed

Facts matter: Sign up for the free Mother Jones Daily newsletter. Support our nonprofit reporting. Subscribe to our print magazine.


The Cleveland Fed has released its latest estimates of expected inflation, and Matt Yglesias thinks it’s good news for the Fed:

I’d say it looks like mission accomplished for the FOMC. Relative to last month, short-term expectations are meaningfully higher indicating a coordination of expectations along a higher demand equilibrium. But long-term expectations remain “anchored” exactly where they were.

As you can see in the modified version of the chart on the right, 1-year inflation expectations have gone up from 1.6 percent to 2.1 percent, while 10-year inflation expectations have remained anchored at 1.5 percent.

But I’m not sure what this tells us. The data is for the first day of the month, so the jump in the chart is from November 1 to December 1. That’s obviously not the result of Wednesday’s Fed announcement. Likewise, September’s Fed announcement should show up as a change in expectations between September 1 and October 1, but inflation expectations declined between those two dates. I’d like to hear more about this from the folks who follow this closely, but to me it looks more like random month-to-month noise than anything else.

REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

payment methods

REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate