Inflation expectations log new record


Repost from 10-12-2021

“Year ahead inflation expectations in the United States rose further to 5.3 percent in September 2021, the eleventh consecutive monthly increase and a new series high since the inception of the survey in 2013. Three-year-ahead inflation expectations also increased, to 4.2 percent from 4.0 percent, the third consecutive monthly increase and also a new record. In contrast, year-ahead home price expectations dropped by 0.4 percentage points to 5.5 percent, the fourth consecutive monthly decrease, driven mostly by respondents from the ‘West’ and ‘Northeast’ Census regions. Also, while expectations about year-ahead price changes decreased for all the commodities, led by a slowdown in the price of gas, college education, and food.”

USAGOLD note: Inflation expectations are an important data set because it, not the CPI inflation rate, is what is formally used to calculate the real rate of return.

Year ahead inflation expectations
(Percent change monthly 2013 to September 2021)

line chart showing New York Fed inflation expectations

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