Consumer Inflation Expectations: Daily Dynamics

We use high frequency identification methods to study the response of consumer inflation expectations to many different types of events. We use data from the Federal Reserve Bank of New York’s Survey of Consumer Expectations. We identify the response of expectations to a large set of shocks, including FOMC announcements, macroeconomic data releases, and news related to the Covid-19 pandemic. The majority of FOMC meetings have no detectable effects on consumer inflation expectations, though certain especially salient announcements have short-lived effects. Good news about the pandemic tends to reduce inflation expectations.