Hot U.S. Inflation Could Stir Once-Sleepy Household Expectations

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(Bloomberg) — U.S. inflation is back in the news after being dormant for years, potentially affecting how Americans think about price pressures after not thinking about them much at all.

The Federal Reserve says expectations that inflation will stay near its 2% target will help to ensure the current surge in consumer prices, which jumped 5% in May, will be temporary. Chair Jerome Powell can expect questions on this at his post-meeting press conference Wednesday.

To explore that assumption and find out more about how Americans form such views, we spoke to Yuriy Gorodnichenko of the University of California, Berkeley, and Michael Weber of the University of Chicago’s Booth School of Business.

They are among the leading economists digging into what a local shopkeeper or family next door understand about central banking. Among…

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