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Forecasting Inflation During the Pandemic: Who Got It Right?
François Gourio, senior economist and economic advisor, and Kavitya Sarma, former research assistant
The sudden rise in inflation that started in 2021 was the largest in 40 years for the United States. The rapidity, size, and persistence of this increase took most observers by surprise. In this article, we conduct a retrospective analysis and compare the accuracy of inflation projections made before, during, and after the Covid-19 pandemic by three groups of people: individual households, professional forecasters, and policymakers on the Federal Open Market Committee (FOMC) of the Federal Reserve System.
Chicago Fed Letter delivers timely economic analysis of issues affecting the regional and national economy. Opinions expressed in this article are those of the author(s) and do not necessarily reflect the views of the Federal Reserve Bank of Chicago or the Federal Reserve System.
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