Public Expecting Much Higher Inflation for 2014

Given the dearth of officially reported consumer price inflation in recent years, don’t look for this to be a major topic today when new Federal Reserve Chair Janet Yellen appears before the House Financial Services Committee in the first of two appearances on Capitol Hill this week to present the central bank’s semi-annual monetary policy report to Congress.

That’s not to say that it won’t be at some point in Yellen’s tenure…

Nevertheless, there is clearly an ongoing disagreement about how fast prices will rise as this WSJ story details the differing views on inflation between the experts and the laymen.

[Must Read: For the First Time in Years, Fiscal Policy Turns from Headwind to Tailwind]

In short, Americans think inflation will be about twice as high as the Fed does, however, as noted in the article, there are fundamental differences in how consumers view current and potential price changes and how economists view them.

Also, kudos to Ms. Yellen who mentions the word “inflation” an impressive 11 times in her prepared testimony today. Somehow, I don’t think this will be quite enough to stop some Republicans from expressing their grave concern about it.

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