Breitbart Business Digest: The Fed’s Inflation Expectations Are the Only Thing Unanchored

The Boston Fed’s Weird Theory of Inflation

The Federal Reserve has long maintained that keeping inflation expectations “anchored” is crucial to controlling actual inflation. The doctrine sounds tidy: so long as the public doesn’t expect too much inflation, inflation itself is unlikely to rise sustainably.

A new paper from researchers at the Boston Fed warns those anchors may be slipping. Household inflation expectations, it claims, have surged to levels not seen since the 1970s—signaling a dangerous “de-anchoring” that could fuel another inflation surge. But their warning rests on questionable measurement choices, contradictory data, and a…

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