The Wall Street Journal reports that inflation expectations are down:
Consumers expect to see 4.1% inflation a year from now, the lowest such reading in two years and down sharply from its recent peak of 6.8%, according to the median response to the New York Fed’s May survey, for example.
A year from now? The most conventional measure of inflation is year-over-year headline CPI. In May it clocked in at . . . 4.1%. That's down from 8.9% a year ago. I'll be shocked if it isn't below 3% a year from now, and 2% wouldn't surprise me.
This is America, dammit.
As a proud middle-class American, I'm entitled to 0% inflation, 4.5% interest on my passbook savings, and banks that don't make up the difference with 23.5% VISA cards.
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Expect WSJ to inflate the expectations of inflation until a Republican is in the White House.
And all the media companies whose owners want an R back.
So basically all of them. Not to mention the journos.
They know that their favorite processed foods haven't come down from their massive price increases and it's annoying them that they can't get their box of Oreos for the same price as it was 2 years ago.
In their minds, this is a sign that inflation remains high. They don't understand disinflation; all they understand is inflation and deflation.
Inflation will be down around 3% in a couple of weeks.
It is 4% now and last June had inflation of about 1.2%. So when we remove June 2022 and replace it with June 2023 then we could get inflation below 3%.
I don't understand why this isn't common knowledge. The news media should know this. Wall Street MUST know it.
Everyone seems to ignore it.
The fact is that our terrible inflation stopped on a dime on 6/30/22. Why? That is a far harder question to answer.
Because inflationistas dominate the news. This is not a new phenomenon.
Are voters in other democracies as stupid as American voters?
In my experience, "consumers have no idea how high inflation is" is *always* true.
Most people don't track the numbers. They see reports in the news, which somehow always focus on the most extreme examples the reporter can find. Those impressions last far beyond the reality -- much like the huge fraction of the public that is convinced that the US crime rate has been skyrocketing for the past 30 years.
As Bush the Elder noted, there is a lag time between things improving and people noticing things are getting better.
Consumers are merely pundits en masse.
This being the Fourth of July, you should post about the economic vision of Bidenomics.
The GOP want to use the term as a means to disparage Biden, but I think there's a case to be made that Biden has a long vision of the US and it has to do with the independence of the US from Chinese and Middle-Eastern policy influence and hard power.
I see it as an extension of Trump populism, but not the fake populism meant to whitewash the billionaire tax cuts and policies meant to force the poor to die by neglect. A partial deglobalization is on tap. The US will one day stop protecting the Persian Gulf and the Gulf of Oman; oil will no longer hold American foreign policy hostage.
The CHIPS Act and other legislative actions are part of it. So, too, was AUKUS. The Inflation Reduction Act, specifically the parts that are meant to boost EVs and the move away from fossil fuels, is also central.
And yes, I think TikTok will be banned if it is not sold to a non-Chinese entity or completely severed from its mainland China parent company, ByteDance.
As with the last time you posted about consumer expectations, they absolutely nailed it. They just nailed it for the wrong time frame. The expectation of inflation a year from now, from the average consumer's perspective, is apparently whatever inflation is right now.
So your title is incorrect. Consumers DO have an idea (a pretty precise one!) how high inflation is, they just don't have the knowledge or training to predict what inflation is likely to be a year from now.