Recent Inflation Surges Have Modestly Affected Long-Term Expectations

"Revisions for inflation over the next year are the highest they’ve been over the past decade and are trending upward, indicating that current unexpected inflation is leading to an increase in expectations for inflation over the near term. However, revisions in expectations for inflation beginning in five years have been very stable over the past decade and have remained within a range of plus or minus 30 basis points. Despite the historically high unexpected inflation, current revisions to long-term inflation expectations remain around 20 basis points, similar to the revisions in 2018 and slightly smaller than revisions in 2014."

The above chart and excerpt are sourced from the report "Recent Inflation Surges Have Modestly Affected Long-Term Expectations", by J. Scott Davis, senior economist at the Federal Reserve Bank of Dallas, April 05,2022.