Image Source: Pexels

From Michigan, NY Fed, and Atlanta Fed SoFIE:

Figure 1: Year-on-Year CPI inflation (bold black), Cleveland y/y nowcast as of 2/11 (black +), Michigan Survey of Consumers (red), NY Fed (blue), Survey of Firms Inflation Expectations (sky blue), all in %. Michigan January reading is preliminary. Source: BLS, Cleveland Fed, Michigan Survey of Consumers via FRED, NY Fed, Atlanta Fed.

The NY Fed survey shows remarkable consistency, while Michigan survey has shown a marked upward swing in the last two months (although the last observation is preliminary). The three readings range between 3% (NY Fed) to 3.3% (Michigan preliminary). The Cleveland Fed inflation expectations for January, based on survey and market data is at 2.6% as of mid-January.

My guess on the CPI equivalent to 2% PCE inflation is 2.45%. In this interpretation, inflation expectations are still about 0.5 to 0.8% above target.

More By This Author: