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Household inflation expectations and the price of oil: it's déjà vu all over again

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  • Bharat Trehan

Abstract

The University of Michigan survey of consumers shows that expected inflation has moved up noticeably over the past few months, raising concerns that we may be in for a period of rising inflation. However, the increase in expected inflation likely reflects the excess sensitivity of consumers to food and energy prices. Consistent with this hypothesis, household surveys have not forecast inflation well in recent years, a period of volatile food and energy prices.

Suggested Citation

  • Bharat Trehan, 2011. "Household inflation expectations and the price of oil: it's déjà vu all over again," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue may23.
  • Handle: RePEc:fip:fedfel:y:2011:i:may23:n:2011-16
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Which Measure of Inflation Should a Central Bank Target?
      by noreply@blogger.com (Carola) in Quantitative Ease on 2015-09-06 17:04:00

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    Cited by:

    1. Bharat Trehan & Maura Lynch, 2013. "Consumer inflation views in three countries," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue nov25.
    2. Arora, Vipin & Gomis-Porqueras, Pedro & Shi, Shuping, 2013. "The divergence between core and headline inflation: Implications for consumers’ inflation expectations," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 497-504.
    3. Benjamin Wong, 2015. "Do Inflation Expectations Propagate the Inflationary Impact of Real Oil Price Shocks?: Evidence from the Michigan Survey," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(8), pages 1673-1689, December.

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