Inflation expectations
Posted by WARREN MOSLER on March 16th, 2012
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.
March 16th, 2012 at 8:30 pm
And I’ve been hearing since the 1970′s how our deficits were going to kill us.
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March 17th, 2012 at 2:34 pm
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?
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WARREN MOSLER Reply:
March 17th, 2012 at 5:35 pm
owner equiv rent is in cpi
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Monica Smith Reply:
March 18th, 2012 at 12:59 pm
@WARREN MOSLER, I guess that explains it. Most of these houses were never lived in for most of the year, if at all.
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Ivan Reply:
March 22nd, 2012 at 11:38 am
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.
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WARREN MOSLER Reply:
March 23rd, 2012 at 12:45 am
that’s to avoid double counting as energy is already in cpi
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Ivan Reply:
March 23rd, 2012 at 8:53 am
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:
March 23rd, 2012 at 10:37 am
yes
March 20th, 2012 at 11:22 am
When you make $200 a week and gas triples and meat doubles its hyper inflation
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WARREN MOSLER Reply:
March 20th, 2012 at 11:28 am
you can define things as you wish but easier to communicate when people share definitions
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Dave Begotka Reply:
March 21st, 2012 at 9:39 pm
@WARREN MOSLER,
sorry warren
it seems our definitions of reality differ too……lol
bikes are faster than cars……..
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WARREN MOSLER Reply:
March 23rd, 2012 at 12:43 am
yes, some bikes are faster than some cars…