How Consumers Can Manifest Inflation

What people believe may happen to prices in the future can influence actual inflation. “People behave in accordance with their expectations and with their sentiment and attitudes towards the economy,” Joanne Hsu, director of the Surveys of Consumers at the University of Michigan, told CNBC. Watch the video above to learn more about how inflation expectations are measured, why the Federal Reserve cares so much about what Americans predict and how consumer behavior can manifest higher prices.

Chapters:
00:00 — Introduction
01:27 — Inflation mentality
05:36 — Short-term and long-term expectations
09:50 — Wage-price spiral

Produced by: Andrea Miller
Additional Camera by: Mark Licea, Jack Hillyer
Edited by: Amy Marino
Animation: Jason Reginato, Josh Kalven
Supervising Producer: Lindsey Jacobson

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How Consumers Can Manifest Inflation