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Federal Reserve Board of Governors

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Data for figures presented with speech given by Governor Mishkin on July 28, 2008. 


Figure 1
Long-Run Inflation Expectations of Professional Forecasters

Euro Area HICP Inflation
Period ECB Survey Consensus Economics
2001:H1 1.8 NA
2001:H2 1.8 NA
2002:H1 1.9 NA
2002:H2 1.9 NA
2003:H1 1.9 1.9
2003:H2 1.9 1.8
2004:H1 1.9 1.9
2004:H2 1.9 2.0
2005:H1 1.9 1.9
2005:H2 1.9 1.9
2006:H1 1.9 1.9
2006:H2 1.9 1.9
2007:H1 1.9 1.9
2007:H2 1.9 1.9
2008:H1 1.9 2.0

NA not available Return to table

U.S. CPI Inflation
Period Blue Chip Survey Consensus Economics SPF (Mean) SPF (Median)
2001:H1 2.6 2.6 2.6 2.50
2001:H2 2.6 2.5 2.5 2.55
2002:H1 2.8 2.5 2.5 2.50
2002:H2 2.5 2.5 2.4 2.45
2003:H1 2.6 2.4 2.5 2.50
2003:H2 2.5 2.3 2.5 2.50
2004:H1 2.5 2.3 2.5 2.50
2004:H2 2.5 2.5 2.5 2.45
2005:H1 2.5 2.4 2.5 2.50
2005:H2 2.5 2.4 2.5 2.50
2006:H1 2.4 2.4 2.5 2.50
2006:H2 2.4 2.3 2.6 2.35
2007:H1 2.3 2.1 2.5 2.40
2007:H2 2.3 2.2 2.5 2.40
2008:H1 2.3 2.2 2.6 2.50

Note: This figure, reproduced from Beechey, Johannsen, and Levin (2008), depicts long-run expectations for euro area inflation, as measured by the Harmonised Index of Consumer Prices (HICP), and for U.S. inflation, as measured by the consumer price index (CPI). In the left panel, the solid line denotes the mean of individual respondents' 5-year-ahead projections in the quarterly survey of professional forecasters conducted by the European Central Bank (ECB) and published on its website (www.ecb.int/stats/prices/indic/forecast/html/index.en.html) Leaving the Board; the dashed line denotes the mean of individual respondents' 6- to 10-year-ahead projections in semiannual surveys conducted by Consensus Economics, Inc., and published in Consensus Forecasts. In the right panel, the solid line denotes the mean of individual respondents' 7- to 11-year-ahead projections in semiannual surveys conducted by Aspen Publishers, Inc., and published in Blue Chip Economic Indicators; the short-dashed line denotes the mean of individual respondents' 6- to 10-year-ahead projections in semiannual surveys conducted by Consensus Economics, Inc., and published in Consensus Forecasts; the long-dashed and dot-dashed lines denote the mean and the median, respectively, of individual respondents' 10-year-average projections in the quarterly Survey of Professional Forecasters (SPF) conducted by the Federal Reserve Bank of Philadelphia (www.philadelphiafed.org/econ/spf).


Figure 2
Cross-Sectional Dispersion in Long-Run Inflation Expectations

Quarter U.S. CPI U.S. PCE Euro Area HICP
2001:Q1 0.4 NA 0.3
2001:Q2 0.4 NA 0.3
2001:Q3 0.4 NA 0.2
2001:Q4 0.4 NA 0.2
2002:Q1 0.4 NA 0.2
2002:Q2 0.3 NA 0.2
2002:Q3 0.3 NA 0.2
2002:Q4 0.4 NA 0.2
2003:Q1 0.3 NA 0.2
2003:Q2 0.4 NA 0.2
2003:Q3 0.3 NA 0.2
2003:Q4 0.4 NA 0.2
2004:Q1 0.4 NA 0.2
2004:Q2 0.4 NA 0.2
2004:Q3 0.3 NA 0.3
2004:Q4 0.3 NA 0.3
2005:Q1 0.4 NA 0.2
2005:Q2 0.4 NA 0.2
2005:Q3 0.7 NA 0.2
2005:Q4 0.3 NA 0.2
2006:Q1 0.4 NA 0.2
2006:Q2 0.4 NA 0.2
2006:Q3 0.5 NA 0.1
2006:Q4 0.5 NA 0.1
2007:Q1 0.4 0.39 0.1
2007:Q2 0.4 0.41 0.1
2007:Q3 0.4 0.41 0.1
2007:Q4 0.5 0.39 0.1
2008:Q1 0.5 0.44 0.1
2008:Q2 0.5 0.47 0.1

Note: This figure, reproduced from Beechey, Johannsen, and Levin (2008), depicts the standard deviation of individual respondents' long-run inflation projections in each survey. The solid line and the long-dashed line refer to the 10-year-average projections for U.S. inflation, as measured by the consumer price index (CPI) and the chain-weighted price index for personal consumption expenditures (PCE), respectively, in the quarterly Survey of Professional Forecasters conducted by the Federal Reserve Bank of Philadelphia (www.philadelphiafed.org/econ/spf). The short-dashed line refers to 5-year-ahead projections for euro area inflation, as measured by the Harmonised Index of Consumer Prices (HICP), in the quarterly survey of professional forecasters conducted by the European Central Bank (www.ecb.int/stats/prices/indic/forecast/html/index.en.html) Leaving the Board.

NA not available Return to table


Figure 3
Far-Forward Inflation Compensation

Data plotted as curves. Units are percentage points. As shown in the figure, both the level and the volatility of far-forward inflation compensation have been higher for the United States than for the euro area over the period from January 2003 through March 2008. The euro area series has averaged about 2.5 percent and has generally remained within a quarter percentage point of that value, whereas the U.S. series has averaged nearly 3 percent and has varied by about a half percentage point around that value.

Note: This figure, reproduced from Beechey, Johannsen, and Levin (2008), depicts the evolution of one-year forward rates of inflation compensation ending ten years ahead for the euro area (solid line) and the United States (dashed line). The euro area series is computed using dealer quotes on inflation swap contracts, and the U.S. series is computed from spreads between nominal and inflation-indexed U.S. Treasury securities.


Figure 4
Macroeconomic Stability in Industrialized Economies, 1999-2007

  Standard Deviation of OECD Unemployment Gap Standard Deviation of Inflation
Australia 0.43 2.49
Canada 0.37 1.70
United Kingdom 0.29 0.95
Japan 0.41 0.93
Norway 0.55 2.68
New Zealand 0.36 1.50
Sweden 0.61 1.53
United States 0.70 1.52
Euro area 0.51 0.91

Note: In this figure, each diamond indicates the standard deviation of consumer price inflation (horizontal axis) and the standard deviation of the unemployment gap (vertical axis) for the specified industrial economy, where the unemployment gap refers to the deviation between the actual unemployment rate and the natural unemployment rate, as estimated by the Organisation for Economic Co-operation and Development (OECD) and reported in semiannual issues of its Economic Outlook.


Figure 5
Comparing Medium- to-Long-Run Inflation Expectations in the United Kingdom and the United States

2001:Q4
Percent of Forecasters
Interval 1.5 - 1.7 1.8 - 2.0 2.1 - 2.3 2.4 - 2.6 2.7 - 2.9 3.0 - 3.2
United Kingdom 0 9 14 64 9 5
United States 8 15 8 35 15 19

2004:Q1
Percent of Forecasters
Interval 1.5 - 1.7 1.8 - 2.0 2.1 - 2.3 2.4 - 2.6 2.7 - 2.9 3.0 - 3.2
United Kingdom 17 65 9 0 9 0
United States 7 19 22 22 22 7

2008:Q2
Percent of Forecasters
Interval 1.5 - 1.6 1.7 - 1.8 1.9 - 2.0 2.1 - 2.2 2.3 - 2.4 2.5+
United Kingdom 10 19 38 23 5 5
United States 3 15 16 24 21 21

Note: This figure depicts the distribution of inflation expectations for the United Kingdom and the United States in the fourth quarter of 2001 (upper left panel), the first quarter of 2004 (upper right panel), and the second quarter of 2008 (lower panel). The solid bars denote the distribution of 13-quarter-ahead inflation projections of respondents to the Bank of England's survey of professional forecasters and published in each quarterly Inflation Report; these projections were specified in terms of retail price inflation in 2001:Q4 and in terms of consumer price inflation in 2004:Q1 and 2008:Q2. The hatched bars denote the distribution of 10-year-average projections for U.S. inflation, as measured by the consumer price index, in the quarterly Survey of Professional Forecasters conducted by the Federal Reserve Bank of Philadelphia (www.philadelphiafed.org/econ/spf). Each bar denotes the percent of forecasters whose projections fall within the specified interval.


Last update: August 2, 2013