Why do consumers expect inflation to keep rising when the data says otherwise?
- Consumers expect inflation to rise even though it has slowed, puzzling experts
- One theory Consumers anchor to recent personal price hikes and prepandemic economy
- Price jumps for necessities like car insurance alter perceptions
- Comparing to prepandemic distorts outlook despite solid economic data
- It may take 6-12 months for perceptions to catch up to declining inflation reality