Expected Inflation over the 12 Months

All measures — even those typically upwardly biased — indicate slower inflation over the next year.

Figure 1: CPI inflation year-on-year (black), median expected from Survey of Professional Forecasters (blue +), median expected (preliminary) from Michigan Survey of Consumers (red), median from NY Fed Survey of Consumer Expectations (light green), forecast from Cleveland Fed (pink), mean from Coibion-Gorodnichenko firm expectations survey [light blue squares]. Source: BLS, University of Michigan via FRED and Investing.comReutersPhiladelphia Fed Survey of Professional ForecastersNY FedCleveland Fed and Coibion and Gorodnichenko

Households and firms (as measured by Coibion and Gorodnichenko in new release) expect elevated inflation, between 4.9% to 5.9%. The Cleveland Fed indicator, based on both market and survey data, is down to 2.2%. The Philadelphia Fed’s Survey of Professional Forecasters will be out in a week.

The Wall Street Journal’s January survey puts December 2022 y/y inflation at 3.11%