Nora Szentivanyi is joined by Mike Feroli, Greg Fuzesi and Jose Cerveira to discuss recent trends in inflation expectation surveys across the US, Euro area and CE-3, and what these mean for monetary policy outlooks.

While longer-term consumer inflation expectations have generally not become unmoored, short-term measures have been more elevated of late. Even as global headline inflation has moderated in recent months, underlying pressures remain intense. A particular concern is that elevated inflation could get embedded into wage- and price-setting behavior, making it much more challenging—and ultimately more costly—to return inflation to target.

The amount of economic pain needed to get inflation back down to central bank targets varies by country and region, but a painless disinflation is unlikely anywhere. The large shocks working their way through economies are not yet giving a clear sense of where inflation will ultimately settle. Survey measures of price and household income expectations, as well as actual pricing decisions by corporates will thus be important to track, with large impacts on the outlook for monetary policy.

 

This podcast was recorded on Oct 24, 2022.

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https://www.jpmm.com/research/content/GPS-4225276-0

https://www.jpmm.com/research/content/GPS-4221745-0

https://www.jpmm.com/research/content/GPS-4154366-0

https://www.jpmm.com/research/content/GPS-4228631-0

https://www.jpmm.com/research/content/GPS-4223938-0 

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