Inflation expectations among U.S. business leaders have declined in the first quarter of 2025, according to the Survey of Firms’ Inflation Expectations (SoFIE), published by the Cleveland Fed’s Center for Inflation Research. In January 2025, CEOs and other top executives projected that inflation, as measured by the Consumer Price Index (CPI), would be 3.2 percent over the next 12 months. This is a decrease from October 2024's expectation of 3.8 percent.

The quarterly survey collects responses from a large panel of firms within the manufacturing and services sectors. The Cleveland Fed emphasizes these data because business leaders' expectations can influence pricing decisions within their firms, potentially affecting overall inflation trends.

Each quarter, SoFIE records respondents' beliefs about expected CPI inflation over the upcoming year. Annually, it also inquires about average CPI inflation predictions for the next five years, CPI inflation over the past year, perceptions regarding the Federal Reserve's inflation target, and the likelihood that CPI inflation will exceed five percent in the following year.

The Federal Reserve Bank of Cleveland is part of one of twelve regional Reserve Banks comprising the Federal Reserve System alongside the Board of Governors in Washington D.C. It participates in monetary policy formulation and provides various services to financial institutions and communities across its district which includes Ohio, parts of Pennsylvania, Kentucky, and West Virginia.