Federal Reserve Study Concludes Consumer Inflation Concerns Are Driven By Asking the Question

April 18th, 2011
in Background, econ_news

Econintersect:  The University of Michigan Survey of Consumers Expectations has recently shown a spike in inflation expectations.  A recent Federal Reserve study says asking the question in the first place in an environment where prices are inflating may overly sensitize the respondents to inflation expectations.

........we suggest that this rise in inflation expectations reflects two factors: (1) sharp expected increases in food and especially gasoline prices and (2) the use of a survey question (“prices in general”) that results in reported expectations being more sensitive to these types of price change.

Follow up:

Source: Federal Reserve



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