Inflation expectations among U.S. business leaders have risen in the second quarter of 2025, as reported by the Survey of Firms’ Inflation Expectations (SoFIE), published by the Cleveland Fed’s Center for Inflation Research. CEOs and top executives indicated in April that they anticipate inflation, measured by the Consumer Price Index (CPI), to reach 3.9 percent over the next year, up from 3.2 percent in January.

The quarterly survey collects responses from a representative panel of firms within the manufacturing and services sectors. The Cleveland Fed shares these findings because business leaders' expectations can affect pricing strategies, which may subsequently influence inflation trends.

Each quarter, SoFIE records respondents' beliefs regarding expected CPI inflation for the upcoming year. Annually, it also asks about average CPI inflation predictions over five years, recent CPI inflation perceptions, views on the Federal Reserve's inflation target, and the likelihood of CPI inflation surpassing 5% in the coming year.

The Federal Reserve Bank of Cleveland is one of twelve regional Reserve Banks that make up part of the Federal Reserve System alongside the Board of Governors in Washington DC. It contributes to national monetary policy formulation, supervises banking organizations, provides payment services to financial institutions and the US Treasury, and engages in activities supporting Federal Reserve operations system-wide.

The Cleveland Fed serves Ohio, western Pennsylvania, eastern Kentucky, and northern West Virginia through its branches in Cincinnati and Pittsburgh.

Chuck Soder can be contacted at chuck.soder@clev.frb.org or 216.672.2798.