On Thursday’s broadcast of CNBC’s “Squawk Box,” President and Chief Executive Officer of the Federal Reserve Bank of Cleveland Loretta Mester stated that, based on “nationally-representative” surveys done by the bank’s Center for Inflation Research, “people expect inflation to remain high” and “well above 2% over the next year,” and this is now feeding salary demands and price setting, which is helping make inflation more persistent.
Mester said that she thinks there is more persistence to inflation than the median path reflected in the Summary of Economic Projections and stated, “We do a lot of what I would call reconnaissance with the district, and across a wide variety of different contacts, business contacts, people in the community development space, households. We have an inflation research center here. Our Center for Inflation Research does surveys that are nationally-representative surveys. And all those surveys basically tell us that inflation, people expect inflation to remain high over the next year, some of the measures have come down a little bit, but they do expect inflation to remain elevated, well above 2% over the next year, and that, of course, then feeds into salary demands, price setting. And so, that persistence is there.”
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