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Press Release

Cleveland Fed researchers on inflation expectations; uncertainty and risk around FOMC projections

Inflation expectations remain well anchored even as CPI edges up, say Cleveland Fed researchers

Recently, several measures of inflation have risen modestly. However, a review of various measures of inflation expectations by Federal Reserve Bank of Cleveland researchers Bill Bednar and Mehmet Pasaogullari suggests that the increases do not signal a persistently higher rate of inflation. The researchers say both survey- and market-based measures of inflation expectations have held steady in relatively narrow ranges for some time, indicating that inflation expectations have remained well anchored.

Read Inflation Expectations Stay Steady as the CPI Edges Up

Uncertainty and risk around the FOMC’s forecasts are back to normal, a welcome sign, says Cleveland Fed researcher

Every three months, the Federal Reserve’s Federal Open Market Committee (FOMC) releases its Summary of Economic Projections (SEP), which reports FOMC participants’ forecasts for economic growth, the unemployment rate, and inflation. From June 2011 through at least the end of 2012, most FOMC participants reported uncertainty to be higher than usual around all of their projections, according to Federal Reserve Bank of Cleveland researcher Saeed Zaman. But since then, uncertainty has gradually declined back to normal levels (i.e., similar to historical averages).

In addition, says Zaman, most FOMC participants currently believe that the risks around their projections are broadly balanced, rather than being likely to cause their projections to miss in only one direction, i.e., either above or below the actual outcome.

Normal uncertainty and broadly balanced risks are a welcome sign, says Zaman, because they tend to go hand-in-hand with stable economic conditions.

Read Uncertainty and Risk around the FOMC’s Macroeconomic Forecasts: Back to Normal

Did you miss last week's conference on Inflation, Monetary Policy, and the Public? You can find the agenda here and view the webcast here.

And be sure to check out Inflation Central, our new website for all things inflation, where you can find our daily inflation nowcasts.

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell,, 513.218.1892