This is a survey of expectations. we got some data on monthly inflation earlier this week:

And official (quarterly) CPI will be out later this month

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This 'expectations' data does not generally impact - though it has done so in the past in New Zealand (you may recall) ... but that was an RBNZ survey so it counts a little more.

The point about consumer inflation expectations (I've posted on this before) is that there is a concern from central banks is to keep inflation expectations "anchored".

In a nutshell, the argument is that inflation expectations can become self-fulfilling.

  • During times of increasing inflation - people see inflation rising so they tend to buy more quickly, thus prompting prices to rise faster. People expect faster inflation (i.e. its 'unanchored' ... rising quickly).
  • On the flipside, if inflation is either very low or in deflation (i.e. general falling prices ... and "Hello" to Japan), people hold off purchasing 'cause there is no rush if prices are falling, and again the argument is this behaviour can feed on itself and grow as a problem. People expect falling prices to fall harder ('unanchored')