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Have long-term inflation expectations declined?

Author

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  • Fernanda Nechio

Abstract

Based on surveys of professional forecasters, expectations for price inflation 5 to 10 years ahead have edged down over the past few years. This decline seems to be primarily driven by revised expectations from forecasters who overestimated inflation in the aftermath of the Great Recession. Currently, the median survey-based expectation for long-term inflation is close to its pre-recession level and appears well anchored at the Fed?s 2% longer-run inflation objective.

Suggested Citation

  • Fernanda Nechio, 2015. "Have long-term inflation expectations declined?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
    • Handle: RePEc:fip:fedfel:00051
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    References listed on IDEAS

    as
    1. Brent Bundick & Craig S. Hakkio, 2015. "Are longer-term inflation expectations stable?," Macro Bulletin, Federal Reserve Bank of Kansas City, pages 1-3, March.
    2. Lucia Alessi & Eric Ghysels & Luca Onorante & Richard Peach & Simon Potter, 2014. "Central Bank Macroeconomic Forecasting During the Global Financial Crisis: The European Central Bank and Federal Reserve Bank of New York Experiences," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 32(4), pages 483-500, October.
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    Cited by:

    1. Corsello, Francesco & Neri, Stefano & Tagliabracci, Alex, 2021. "Anchored or de-anchored? That is the question," European Journal of Political Economy, Elsevier, vol. 69(C).
    2. John C. Williams, 2015. "The recovery’s final frontier?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
    3. Sami Oinonen & Maritta Paloviita, 2017. "How Informative are Aggregated Inflation Expectations? Evidence from the ECB Survey of Professional Forecasters," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 13(2), pages 139-163, November.
    4. Richard Ashley & Randal J. Verbrugge, 2019. "The Intermittent Phillips Curve: Finding a Stable (But Persistence-Dependent) Phillips Curve Model Specification," Working Papers 19-09R2, Federal Reserve Bank of Cleveland, revised 14 Feb 2023.
    5. repec:zbw:bofrdp:2016_015 is not listed on IDEAS
    6. John C. Williams, 2015. "Data is the new black: monetary policy by the numbers," Speech 140, Federal Reserve Bank of San Francisco.
    7. Oinonen, Sami & Paloviita, Maritta, 2016. "How informative are aggregated inflation expectations? Evidence from the ECB Survey of Professional Forecasters," Bank of Finland Research Discussion Papers 15/2016, Bank of Finland.

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