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Surveys often measure consumers' inflation expectations by asking directly about prices in general or overall inflation, concepts that may not be well-defined for some individuals. In this Commentary, we propose a new, indirect way of measuring consumer inflation expectations: Given consumers' expectations about developments in prices of goods and services during the next 12 months, we ask them how their incomes would have to change to make them equally well-off relative to their current situation such that they could buy the same amount of goods and services as they can today. Using a massive number of survey responses at a high frequency, we show that this measure of indirect consumer inflation expectations has risen sharply since early 2021. Higher inflation experiences correlate with higher indirect consumer inflation expectations across US cities and around the world., Inflation expectations play a crucial role in households' and businesses' decisions. For example, when putting money into a certificate of deposit at a bank, the nominal interest rate tells depositors [...]

The COVID-19 vaccination drive raises questions about the trajectory of the economic recovery and the pandemic's impact on consumers' longer-term behaviors. In this Commentary, we examine the evolution of consumers' expectations for their post-crisis spending on services that have been dramatically curtailed by the pandemic: visiting restaurants, bars, and hotels, using public transportation, and attending crowded events. We document a U-shaped pattern of expected future use of these services, with growing pessimism in summer 2020 that had largely reversed by fall 2020--for most groups. More recently, higher-income individuals have indicated that they expect to sharply increase their use of these services compared with their pre-pandemic behaviors, but there has been a notable scarring of expectations among older Americans., The distribution of multiple COVID-19 vaccines provides hope that the virus will be brought under better control in the not-too-distant future, potentially allowing for a broadening recovery in economic activity. [...]

To provide insights into the processes that drive inflationary dynamics, the Federal Reserve Bank of Cleveland holds an annual conference on the topic of inflation: the Inflation: Drivers and Dynamics series. The 2020 installment of the conference was held on May 21-22, 2020. This Commentary summarizes the papers at the conference, which broadly fell into four categories: (1) empirical Phillips curves, (2) networks and Phillips curves, (3) expectations formation, and (4) price-setting behavior and inflation., Inflation is a topic of considerable interest and importance to the public, policymakers, and academics. Researchers continue to investigate new--and, sometimes, old--aspects of the inflation process in an ongoing attempt [...]

Masks or cloth face coverings have the potential to help reduce the spread of COVID-19 without greatly disrupting economic activity if they are widely used. To assess the state of mask wearing, we surveyed US consumers about their recent and prospective mask-wearing behavior. We find that most respondents are wearing masks in public but that some respondents are less likely to follow social-distancing guidelines while doing so, indicating a potential tradeoff between two of the recommended methods that jointly reduce coronavirus transmission. While most respondents indicated that they were extremely likely to wear a mask if required by public authorities, the reported likelihood is strongly dependent on age and perceived mask efficacy., The novel coronavirus that causes COVIDT9 continues to spread in the United States. After an initial burst of confirmed or probable cases of COVID-19 in late March and early April [...]

The relationship between the Phillips curve and inflation has become weaker over time, producing questions regarding how policymakers might connect inflation to the rest of the economy. Presentations given during the 'Inflation: Drivers and Dynamics' session of the Central Bank Research Association's annual meeting focused on the intersection of monetary policy and inflation dynamics to examine the ways in which policy might impact inflation and related expectations and processes. This Economic Commentary summarizes the papers presented during this session., Monetary policy and inflation interact in intricate ways. Both theoretical modelers and real-world policymakers usually connect inflation to the rest of the economy via the Phillips curve. In its simplest [...]