People’s inflation expectations are rising—and will be hard to bring down

Consumer prices across the rich world are rising by more than 9% year on year, the highest rate since the 1980s. Worryingly, there is growing evidence that the public is starting to expect consistently high inflation. Figures suggesting that Americans’ medium-term expectations of inflation had risen helped set off the market turmoil in early June, which culminated in the Federal Reserve raising interest rates by three-quarters of a percentage point. Central banks urgently need to convince people that they are serious about getting inflation down. But a range of evidence suggests that changing the public’s mind could be extraordinarily difficult.