Atlanta Fed’s Business Inflation Expectations Remain Sky High

The inflation expectations of businesses in the southeastern U.S. dipped in July, indicating that some inflationary pressure may have come down in recent weeks, data from the Federal Reserve Bank of Atlanta said Wednesday.

The Atlanta Fed said that companies year ahead expectations for price increases “decreased significantly” from 3.0 percent to 2.8 percent. That brings the measure down to the May level, which was the highest ever recorded in data going back nearly a decade.

The survey asks businesses in the Sixth Federal Reserve District—which includes Alabama, Florida, and Georgia, and portions of Louisiana, Mississippi, and Tennessee—about prices as well as current and expected business conditions, profit margins, and sales.

The survey was released Wednesday following data showing much higher than expected inflation for June, both in the Producer Price Index and the Consumer Price Index. While limited to the Atlanta Fed’s territory, the survey’s results bolster the case of those who argue that high inflation will be transitory. Fed chair Jerome Powell is expected to argue in testimony before a Congressional panel Wednesday that inflation will moderate but remain elevated in the months ahead.