Inflation forecasts reveal changing trends and volatility in economic stability.
The article looks at how U.S. inflation and predictions from experts about future inflation are connected. They use a special model to study how inflation changes over time and how accurate the predictions are. The researchers found that longer-term predictions help estimate the overall trend of inflation. Before a big change in inflation in the past, the predictions were more connected to the economy's ups and downs. But after that change, the predictions were less affected by the economy. Also, experts started updating their predictions less often over time. This happened at the same time that unexpected events became less important in explaining inflation. This shows that experts' predictions don't always stay the same when inflation changes.