Findings from Federal Reserve Bank of Kansas City Has Provided New Data on Investment (Heterogeneity In Household Inflation Expectations and Monetary Policy): Investment

Economics Daily Report

2025 FEB 04 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Current study results on Investment have been published. According to news originating from Kansas City, Missouri, by NewsRx correspondents, research stated, “We empirically characterize the heterogeneity in the conditional distribution of household inflation expectations across demographic groups using the Survey of Consumer Expectations and also investigate how monetary policy shocks affect the conditional distribution.”

Our news journalists obtained a quote from the research from the Federal Reserve Bank of Kansas City, “We find that, across all the groups, the peak of the group-specific distribution of household inflation expectations aligns closely with the 2% target set by the Federal Reserve, but there is substantial heterogeneity both within and across groups, primarily on the right. However, in response to a contractionary monetary policy shock identified by high-frequency financial market responses, households overall adjust their inflation expectations significantly downwards.”

According to the news editors, the research concluded: “In addition, the magnitude of the reaction is more pronounced in the upper quantile of low-income groups whose unconditional inflation expectations are less well anchored.”

This research has been peer-reviewed.

For more information on this research see: Heterogeneity In Household Inflation Expectations and Monetary Policy. Journal of Financial Econometrics, 2025;23(1). Journal of Financial Econometrics can be contacted at: Oxford Univ Press, Great Clarendon St, Oxford OX2 6DP, England. (Oxford University Press - http://www.oup.com/; Journal of Financial Econometrics - jfec.oxfordjournals.org)

The news correspondents report that additional information may be obtained from Taeyoung Doh, Federal Reserve Bank of Kansas City, Mem Dr, Kansas City, MO 64198, United States. Additional authors for this research include Ji Hyung Lee and Woong Yong Park.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1093/jjfinec/nbae034. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.