What Do Financial Officers Predict for Price Growth?
A survey of chief financial officers (CFOs) and other financial decisionmakers provides a new measure of inflation expectations, which tracks well with actual core consumer price index inflation. The most recent survey data suggest that core CPI inflation may remain elevated over this year if historical relationships continue to hold.
A survey of chief financial officers and other financial decisionmakers yields a new measure of inflation expectations. The survey asks respondents to report expected price growth at their own firms, providing an economy-wide indicator that tracks well with actual core consumer price index inflation. The survey data, collected by Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta, include firms of all sizes across all major industries. The data suggest that core CPI inflation may remain elevated over this year if historical relationships continue to hold. Inflation expectations matter as an indicator of future inflation and as an influence on actual pricing decisions. The survey's focus on respondents' expectations about their own firms differs from other business surveys that emphasize expectations for the broader U.S. economy.
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