## Thursday, December 7, 2017

### Consumer Inflation Uncertainty Holding Steady

I recently updated my Consumer Inflation Uncertainty Index through October 2017. Data is available here and the official (gated) publication in the Journal of Monetary Economics is here. Inflation uncertainty remains low by historic standards. Uncertainty about longer-run (5- to 10-year ahead) inflation remains lower than uncertainty about next-year inflation.

In recent months, there has been no notable change in inflation uncertainty at either horizon.

The average "less uncertain" type consumer still expects longer-run inflation around 2.4%, while the longer-run inflation forecasts of "highly uncertain" consumers have risen in recent months to the 8-10% range.

1. Inflation is directly correlated to the oil price. There is no substantial inflation without substantial oil price rise. So, the recent oil price increasing from $50-$55 to the current range of $65-$70 will certainly have some impact on inflation. How much? We will see very soon.