I've noted before that US data since the Great Moderation actually look a lot like an old-fashioned Phillips curve, which is actually what you would expect if expectations of inflation are, as the central bankers like to say, "well anchored".
He adds:Inflation has already persisted below target longer than the Fed expected, and the latest data suggest that it is the public's expectations of inflation that are converging towards actual inflation, rather than the other way around.
Inflation has already persisted below target longer than the Fed expected, and the latest data suggest that it is the public's expectations of inflation that are converging towards actual inflation, rather than the other way around.
Second, expectations of inflation remain contained.
And QE also helps shape expectations of inflation.
But a deep recession has changed expectations of inflation.
We've been able to keep expectations of inflation relatively high.
Consumer-price inflation, at 9.3%, remains more stubborn, as do Indians' expectations of inflation.
Will avoiding that trap be enough to curb expectations of inflation?
When expectations of inflation are rising, TIPS tend to do well.
So have market expectations of inflation risen from their unworkably low levels of recent months?
