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Finance and Economics Discussion Series: 2008-03 Screen Reader version ♣

Monetary Policy Actions and Long-Run Inflation Expectations

Michael T. Kiley
December 2007
Version 3


Figure 1, Panel A. Expected CPI inflation over the next 10 years from surveys of professional forecasters
Date/QuarterExpected CPI inflation over the next 10 years from surveys of professional forecasters, raw dataExpected CPI inflation over the next 10 years from surveys of professional forecasters, interpolated data
1978Q1  
1978Q2  
1978Q36.26.2
1978Q4 6.3853479853
1979Q1 6.5666666667
1979Q26.756.75
1979Q3 6.825
1979Q46.96.9
1980Q1 7.375
1980Q27.849999999999997.84999999999999
1980Q38.618.61
1980Q48.828.82
1981Q18.288.28
1981Q27.877.87
1981Q37.627.62
1981Q47.737.73
1982Q17.167.16
1982Q26.7599996.759999
1982Q36.76499956.7649995
1982Q46.5999996.599999
1983Q16.326.32
1983Q26.586.58
1983Q36.6299996.629999
1983Q46.656.65
1984Q16.586.58
1984Q26.50499956.5049995
1984Q36.049998999999996.04999899999999
1984Q45.75.7
1985Q15.365.36
1985Q25.47499955.4749995
1985Q35.6955.695
1985Q45.6149995.614999
1986Q15.284999499999995.28499949999999
1986Q25.25333266675.2533326667
1986Q35.11999955.1199995
1986Q45.106666333299995.10666633329999
1987Q15.284999499999995.28499949999999
1987Q25.29499955.2949995
1987Q35.485.48
1987Q45.145.14
1988Q15.2355.235
1988Q25.044999999999995.04499999999999
1988Q34.924.92
1988Q44.66666666674.6666666667
1989Q14.694.69
1989Q24.744.74
1989Q34.534.53
1989Q44.3054.305
1990Q13.953.95
1990Q24.269999999999994.26999999999999
1990Q34.389999999999994.38999999999999
1990Q44.34.3
1991Q14.3154.315
1991Q24.344.34
1991Q3 4.17
1991Q444
1992Q13.73.7
1992Q23.93.9
1992Q33.753.75
1992Q43.63.6
1993Q13.53.5
1993Q23.73.7
1993Q33.453.45
1993Q43.453.45
1994Q13.453.45
1994Q23.53.5
1994Q33.53.5
1994Q43.53.5
1995Q13.299999999999993.29999999999999
1995Q23.353.35
1995Q33.23.2
1995Q433
1996Q133
1996Q233
1996Q333
1996Q433
1997Q133
1997Q22.852.85
1997Q333
1997Q42.652.65
1998Q12.62.6
1998Q22.52.5
1998Q32.52.5
1998Q42.52.5
1999Q12.32.3
1999Q22.52.5
1999Q32.52.5
1999Q42.52.5
2000Q12.52.5
2000Q22.52.5
2000Q32.52.5
2000Q42.52.5
2001Q12.52.5
2001Q22.52.5
2001Q32.52.5
2001Q42.552.55
2002Q12.52.5
2002Q22.52.5
2002Q32.52.5
2002Q42.452.45
2003Q12.52.5
2003Q22.52.5
2003Q32.52.5
2003Q42.52.5
2004Q12.52.5
2004Q22.52.5
2004Q32.52.5
2004Q42.52.5
2005Q12.452.45
2005Q22.52.5
2005Q32.52.5
2005Q42.52.5
2006Q12.52.5
2006Q22.52.5
2006Q32.52.5
2006Q42.52.5
2007Q12.352.35
2007Q22.42.4
2007Q32.42.4


Figure 1, Panel B. Expected inflation over the next 5 to 10 years from the Reuters/Michigan Survey of Consumers
Date/QuarterExpected inflation over the next 5 to 10 years from the Reuters/Michigan Survey of Consumers, raw dataExpected inflation over the next 5 to 10 years from the Reuters/Michigan Survey of Consumers, interpolated data
1978Q1 6.1889671362
1978Q2 6.4410328638
1978Q3 6.6958685446
1978Q4 6.9507042254
1979Q17.27.2
1979Q2 7.82158469949999
1979Q3 8.45
1979Q4 9.0784153005
1980Q19.79.7
1980Q2 9.35191256829999
1980Q399
1980Q4 7.8205128205
1981Q16.66666666676.6666666667
1981Q2 6.50091074679999
1981Q36.333333333299996.33333333329999
1981Q4 5.9963369963
1982Q15.66666666675.6666666667
1982Q2 5.4677595628
1982Q35.26666666675.2666666667
1982Q4 5.0813186813
1983Q14.94.9
1983Q2 4.933151184
1983Q34.96666666674.9666666667
1983Q4 4.9666666667
1984Q14.96666666674.9666666667
1984Q2 4.9666666667
1984Q34.96666666674.9666666667
1984Q4 4.8487179487
1985Q14.73333333334.7333333333
1985Q2 4.70018214939999
1985Q34.66666666674.6666666667
1985Q4 4.2285714286
1986Q13.83.8
1986Q23.93.9
1986Q344
1986Q43.83.8
1987Q13.93.9
1987Q24.34.3
1987Q33.399999999999993.39999999999999
1987Q44.14.1
1988Q1 4.1199561404
1988Q2 4.1399122807
1988Q3 4.16008771929999
1988Q4 4.1802631579
1989Q1 4.2
1989Q2 4.2199561404
1989Q3 4.2401315789
1989Q4 4.26030701749999
1990Q1 4.2800438596
1990Q24.34.3
1990Q34.54.5
1990Q44.56666666674.5666666667
1991Q14.599999999999994.59999999999999
1991Q24.36666666674.3666666667
1991Q34.03333333334.0333333333
1991Q43.76666666673.7666666667
1992Q13.53333333333.5333333333
1992Q23.76666666673.7666666667
1992Q33.83.8
1992Q43.63.6
1993Q13.73.7
1993Q23.63.6
1993Q33.36666666673.3666666667
1993Q43.53.5
1994Q13.299999999999993.29999999999999
1994Q23.33333333333.3333333333
1994Q33.299999999999993.29999999999999
1994Q43.23333333333.2333333333
1995Q13.23333333333.2333333333
1995Q23.26666666673.2666666667
1995Q33.13333333333.1333333333
1995Q43.13333333333.1333333333
1996Q13.23333333333.2333333333
1996Q23.13333333333.1333333333
1996Q33.23333333333.2333333333
1996Q433
1997Q13.13.1
1997Q233
1997Q333
1997Q43.06666666673.0666666667
1998Q12.86666666672.8666666667
1998Q22.82.8
1998Q32.76666666672.7666666667
1998Q42.83333333332.8333333333
1999Q12.83333333332.8333333333
1999Q22.83333333332.8333333333
1999Q32.86666666672.8666666667
1999Q42.86666666672.8666666667
2000Q133
2000Q22.83333333332.8333333333
2000Q32.92.9
2000Q42.96666666672.9666666667
2001Q12.96666666672.9666666667
2001Q23.03333333333.0333333333
2001Q32.93333333332.9333333333
2001Q42.83333333332.8333333333
2002Q12.76666666672.7666666667
2002Q22.86666666672.8666666667
2002Q32.73333333332.7333333333
2002Q42.82.8
2003Q12.73333333332.7333333333
2003Q22.73333333332.7333333333
2003Q32.72.7
2003Q42.76666666672.7666666667
2004Q12.86666666672.8666666667
2004Q22.82.8
2004Q32.76666666672.7666666667
2004Q42.76666666672.7666666667
2005Q12.82.8
2005Q22.92.9
2005Q32.93333333332.9333333333
2005Q43.13.1
2006Q12.92.9
2006Q23.06666666673.0666666667
2006Q33.03333333333.0333333333
2006Q43.03333333333.0333333333
2007Q12.93333333332.9333333333
2007Q23.03333333333.0333333333
2007Q32.96666666672.9666666667


Figure 2, Panel A. CPI inflation (Four-quarter percent change in the CPI)
Date/QuarterCPI inflation (Four-quarter percent change in the CPI)
1978Q1 
1978Q2 
1978Q38.034948138275
1978Q48.934958828675
1979Q19.78391513224999
1979Q210.765280598325
1979Q311.736329416875
1979Q412.64915604455
1980Q114.2192478901
1980Q214.43395557525
1980Q312.98393099075
1980Q412.587857334825
1981Q111.285251434775
1981Q29.887532103525
1981Q310.860764631075
1981Q49.603097853975
1982Q17.62099070175
1982Q26.94625239684999
1982Q35.8252187642
1982Q44.4681114456
1983Q13.635605623625
1983Q23.33599597155
1983Q32.542986546625
1983Q43.248366288075
1984Q14.62839713744999
1984Q24.40791777635
1984Q34.2994175936
1984Q44.158627212925
1985Q13.641184065625
1985Q23.60713356994999
1985Q33.3536792146
1985Q43.5155568459
1986Q13.108771919775
1986Q21.703399542975
1986Q31.69294510675
1986Q41.364023188
1987Q12.06910708395
1987Q23.70470643377499
1987Q34.165978603825
1987Q44.406383750725
1988Q13.966882567275
1988Q23.9815141043
1988Q34.144821156225
1988Q44.30864866637499
1989Q14.67467502155
1989Q25.16372309657499
1989Q34.713179290825
1989Q44.63490376305
1990Q15.24570762737499
1990Q24.59375636295
1990Q35.5751741451
1990Q46.28463829907499
1991Q15.27427470569999
1991Q24.86909575285
1991Q33.867570031125
1991Q42.965968022875
1992Q12.894529862225
1992Q23.0737566804
1992Q33.07490882345
1992Q43.12237679625
1993Q13.17332657965
1993Q23.1253114083
1993Q32.819029470875
1993Q42.770789700825
1994Q12.5414794602
1994Q22.3842538483
1994Q32.857687401825
1994Q42.60555112695
1995Q12.841961936625
1995Q23.09662881425
1995Q32.6652113378
1995Q42.62767502765
1996Q12.786175734925
1996Q22.82959647055
1996Q32.902151987525
1996Q43.23275757304999
1997Q12.94648351235
1997Q22.30597021185
1997Q32.229298975775
1997Q41.8924270166
1998Q11.484417133975
1998Q21.584778938025
1998Q31.597688413525
1998Q41.526949422275
1999Q11.687691111425
1999Q22.113978385025
1999Q32.348752050825
1999Q42.62198764255
2000Q13.25871711515
2000Q23.29469966125
2000Q33.469721201025
2000Q43.444449092825
2001Q13.41053862515
2001Q23.325986144525
2001Q32.68298961175
2001Q41.887443757925
2002Q11.237839812375
2002Q21.324818295525
2002Q31.5843481488
2002Q42.25575698265
2003Q12.884856976925
2003Q22.143943570325
2003Q32.224995278025
2003Q41.90076805735
2004Q11.827356683925
2004Q22.82540663295
2004Q32.73619018335
2004Q43.355322599425
2005Q13.006168411125
2005Q22.92143158059999
2005Q33.79001461812499
2005Q43.757115836525
2006Q13.7038012182
2006Q23.997120512125
2006Q33.362619313625
2006Q41.983449844025
2007Q12.4634477482
2007Q22.699045484725
2007Q32.331608869175


Figure 2, Panel B. Nominal federal funds rate (annual rate)
Date/QuarterNominal federal funds rate (annual rate)
1978Q17.0890751698
1978Q27.6640967028
1978Q38.5539609317
1978Q410.2005781367
1979Q110.7519273954
1979Q210.8719761243
1979Q311.7302073746
1979Q414.7596853426
1980Q116.50089703
1980Q213.7025862214
1980Q310.4734903194
1980Q417.4332817289
1981Q118.314829695
1981Q219.7585384379
1981Q319.5246418716
1981Q414.7697996733
1982Q115.4915483091
1982Q215.8484131195
1982Q311.812711531
1982Q49.87288138579999
1983Q19.1740347592
1983Q29.3327501421
1983Q310.065162507
1983Q410.0326680593
1984Q110.3205861819
1984Q211.2924037154
1984Q312.2404877096
1984Q49.8475838952
1985Q18.972566471
1985Q28.3644779843
1985Q38.3380485106
1985Q48.5624532417
1986Q18.25656394139999
1986Q27.2665391443
1986Q36.498229219
1986Q46.56196736319999
1987Q16.5132271504
1987Q26.9765711961
1987Q37.1795950318
1987Q47.2664300452
1988Q16.990633869
1988Q27.52422773099999
1988Q38.4273725464
1988Q48.9675025012
1989Q110.0495472726
1989Q210.3639720728
1989Q39.6463794102
1989Q49.1252546886
1990Q18.7237014767
1990Q28.715220193
1990Q38.62371318099999
1990Q48.16557929939999
1991Q16.7386502914
1991Q26.1235251645
1991Q35.8903510267
1991Q45.0045100421
1992Q14.16246739819999
1992Q23.8967238704
1992Q33.3572790346
1992Q43.1259891468
1993Q13.1304288069
1993Q23.0882673042
1993Q33.1506521272
1993Q43.0774759357
1994Q13.3101853338
1994Q24.0761685169
1994Q34.6509318257
1994Q45.3762308073
1995Q16.063206862
1995Q26.2930689393
1995Q36.0527749175
1995Q45.96948852349999
1996Q15.5913347965
1996Q25.4595553351
1996Q35.5274025651
1996Q45.4984528894
1997Q15.4983263084
1997Q25.7590881422
1997Q35.7700070677
1997Q45.74134056369999
1998Q15.7561467388
1998Q25.7342321216
1998Q35.770356707
1998Q45.0509179989
1999Q14.9148176989
1999Q24.9298673265
1999Q35.2978832242
1999Q45.52600721829999
2000Q15.9226233042
2000Q26.5664679938
2000Q36.8333085852
2000Q46.7823502597
2001Q15.8381333899
2001Q24.4827666809
2001Q33.6135171301
2001Q42.1869470602
2002Q11.7726683237
2002Q21.7900959716
2002Q31.779664449
2002Q41.4752652194
2003Q11.2750616234
2003Q21.2721317669
2003Q31.0361774714
2003Q41.0155809082
2004Q11.0222958943
2004Q21.029161813
2004Q31.4618469065
2004Q41.9969272538
2005Q12.5347990896
2005Q23.029711606
2005Q33.5683130738
2005Q44.1173396982
2006Q14.6207360544
2006Q25.1006705075
2006Q35.4631194442
2006Q45.4631194442
2007Q15.47373115179999
2007Q25.4667219853
2007Q35.4132775213


Figure 2, Panel C. Output gap (percent deviation of GDP from trend, FRB/US model estimate)
Date/QuarterOutput gap (percent deviation of GDP from trend, FRB/US model estimate)
1978Q1-1.1886597042
1978Q22.3382347622
1978Q32.0719957773
1978Q42.3338474426
1979Q11.5617785931
1979Q21.0348793694
1979Q31.078897948
1979Q40.3936177193
1980Q1-0.4161475326
1980Q2-3.3459035828
1980Q3-3.8572121398
1980Q4-2.2247504982
1981Q1-1.3589549484
1981Q2-2.5646333421
1981Q3-1.8398413519
1981Q4-3.4941319334
1982Q1-6.0009477099
1982Q2-5.3811652415
1982Q3-6.60476526989999
1982Q4-7.40807565819999
1983Q1-6.282745359
1983Q2-4.9820897883
1983Q3-3.5491770274
1983Q4-1.8667825619
1984Q1-0.4717465056
1984Q20.1543163402
1984Q30.0693632646999999
1984Q40.1005491939
1985Q10.3021806131
1985Q20.3376004698
1985Q30.7798273152
1985Q40.4989509545
1986Q10.1314845498
1986Q2-0.9371084165
1986Q3-0.9262851613
1986Q4-1.0207529859
1987Q1-0.6714742091
1987Q2-0.5130096016
1987Q3-0.2127975425
1987Q40.865014869699999
1988Q10.3827173009
1988Q21.4206628737
1988Q30.9373334813
1988Q41.7161179828
1989Q12.1253129652
1989Q21.9516604015
1989Q31.8290452781
1989Q41.2688329542
1990Q11.5544694446
1990Q20.8218630797
1990Q3-0.0953682389
1990Q4-1.263125736
1991Q1-2.5277410767
1991Q2-2.8122977119
1991Q3-2.8699257979
1991Q4-3.083924265
1992Q1-3.3091635009
1992Q2-3.1466738754
1992Q3-3.2124501737
1992Q4-2.7392100561
1993Q1-2.9026156094
1993Q2-2.6353241765
1993Q3-2.8066354041
1993Q4-2.0097430303
1994Q1-1.6537747114
1994Q2-0.2684534801
1994Q30.0224641689
1994Q40.2926778478
1995Q10.182666455
1995Q2-0.2821892572
1995Q30.3761669557
1995Q40.2004910086
1996Q1-0.0740544425
1996Q20.8549693419
1996Q30.9455842004
1996Q41.5886440949
1997Q11.9429646762
1997Q22.3718517815
1997Q32.6361149611
1997Q42.5129373934
1998Q12.6246474987
1998Q22.427193508
1998Q32.4333625982
1998Q43.4407945783
1999Q12.9080588361
1999Q23.1215961438
1999Q33.4638778941
1999Q43.9849838029
2000Q13.4274748831
2000Q23.6751148648
2000Q32.9771169478
2000Q42.3292547684
2001Q11.5364857811
2001Q20.8910267935
2001Q3-0.2361515879
2001Q4-1.0683195642
2002Q1-1.4936864749
2002Q2-1.3970427027
2002Q3-1.7245568868
2002Q4-2.0430938149
2003Q1-2.5855829255
2003Q2-2.6443233479
2003Q3-1.7748923888
2003Q4-1.524031207
2004Q1-1.3817268263
2004Q2-1.3454034626
2004Q3-0.8075862041
2004Q4-0.7633608769
2005Q1-0.767654037699999
2005Q2-0.4520017167
2005Q3-0.1875322509
2005Q4-0.2136065639
2006Q10.4177181696
2006Q20.4212020912
2006Q30.2596431961
2006Q40.17044519
2007Q1-0.2343872257
2007Q20.4376591213
2007Q30.5187248457


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