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Thinking Outside the Box: Do SPF Respondents Have Anchored Inflation Expectations?

Author

Listed:
  • Carola Binder
  • Wesley Janson
  • Randal J. Verbrugge

Abstract

Despite the stability of the median 10-year inflation expectations in the Survey of Professional Forecasters (SPF) near 2 percent, we show that not a single SPF respondent?s expectations have been anchored at the target since the Federal Open Market Committee?s (FOMC) enactment of an inflation target in January 2012, or even since 2015. However, we find significant evidence for ?delayed anchoring,? or a move toward being anchored, particularly after the federal funds rate lifted off in December 2015.

Suggested Citation

  • Carola Binder & Wesley Janson & Randal J. Verbrugge, 2019. "Thinking Outside the Box: Do SPF Respondents Have Anchored Inflation Expectations?," Working Papers 19-15, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwq:191500
    DOI: 10.26509/frbc-wp-201915
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    Cited by:

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    2. Garcia, Juan Angel & Gimeno, Ricardo, 2024. "Navigating high inflation: A joint analysis of inflation dynamics and long-term inflation expectations in Latin America," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 5(4).

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    More about this item

    Keywords

    inflation expectations; persistent disagreement; credibility; delayed anchoring;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E7 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics

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