Inflation expectations

Seems all those hyper inflation forecasts haven’t had all that much influence.

;)

Cleveland Fed Estimates of Inflation Expectations

The Federal Reserve Bank of Cleveland reports that its latest estimate of 10-year expected inflation is 1.38 percent. In other words, the public currently expects the inflation rate to be less than 2 percent on average over the next decade.

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12 Responses to Inflation expectations

  1. Dave Begotka says:

    When you make $200 a week and gas triples and meat doubles its hyper inflation

    Reply

    WARREN MOSLER Reply:

    you can define things as you wish but easier to communicate when people share definitions

    Reply

    Dave Begotka Reply:

    @WARREN MOSLER,

    sorry warren

    it seems our definitions of reality differ too……lol

    bikes are faster than cars……..

    Reply

    WARREN MOSLER Reply:

    yes, some bikes are faster than some cars…

  2. Monica Smith says:

    Could somebody explain how come inflated real estate sales didn’t register as inflation? In my neighborhood, people bought less than half acre lots for $650,000. The houses they had built cost $150,000 in labor and then got sold for a million until the collapse. Now those lots are assessed by the public appraiser at $115,000 and the properties are selling at a more realistic $350,000–realistic in the sense that 50 year old houses on similar sized lots, which went for $100,000 ten years before were going for $350,000 at the height of the bubble. Does real estate speculation simply not count in the calculus of inflation?

    Reply

    WARREN MOSLER Reply:

    owner equiv rent is in cpi

    Reply

    Monica Smith Reply:

    @WARREN MOSLER, I guess that explains it. Most of these houses were never lived in for most of the year, if at all.

    Reply

    Ivan Reply:

    Owner equivalent rent (OER) is also an interesting calculation. It makes up a large percentage of CPI. The BLS assumes that landlords pay utilities. When energy prices go higher (and rental rates remain unchanged), OER actually declines.

    Reply

    WARREN MOSLER Reply:

    that’s to avoid double counting as energy is already in cpi

    Reply

    Ivan Reply:

    It is in theory. Unfortunately, the Fed prefers core CPI which excludes energy. Also, a very high percentage of landlords don’t pick up utilities. Thus, Core CPI is understated when energy prices are rising.

    WARREN MOSLER Reply:

    yes

  3. Paul Palmer says:

    And I’ve been hearing since the 1970’s how our deficits were going to kill us.

    Reply

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