Inflation expectations among U.S. business leaders increased in the second quarter of 2024, according to the Survey of Firms’ Inflation Expectations (SoFIE), published by the Federal Reserve Bank of Cleveland. CEOs and other top executives reported in April (2024:Q2) that they expect inflation as measured by the Consumer Price Index to be 3.8 percent over the next 12 months, up from 3.4 percent in January (2024:Q1).

The quarterly survey gathers responses from a large representative panel of firms in the manufacturing and services sectors. The Cleveland Fed reports these survey data because business leaders’ inflation expectations can influence the prices their firms charge customers, which can, in turn, influence the path of inflation.

Each quarter SoFIE captures respondents’ beliefs for expected CPI inflation over the next 12 months. Once per year it asks about beliefs for average CPI inflation over the next five years, CPI inflation over the last 12 months, perceptions of the Federal Reserve’s inflation target, and the probability that CPI inflation over the next 12 months will exceed 5%.

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in formulating our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide.

In addition to its primary functions, this institution supports communities across Ohio and parts of Pennsylvania, West Virginia, and Kentucky through research, outreach, and educational activities. The Cleveland Fed also has branches in Cincinnati and Pittsburgh.

For more information about SoFIE or any other inquiries related to this report contact Chuck Soder at chuck.soder@clev.frb.org or call at 216.672.2798.