How Peoples Expectations Influence Inflation | #shorts
00:00:00.000 | there is this weird thing about inflation,
00:00:03.120 | which is inflation expectations,
00:00:05.060 | what people think inflation is gonna do,
00:00:07.380 | has a huge effect on what inflation actually does, right?
00:00:11.140 | And for a long time, a sort of bizarrely long time,
00:00:14.740 | we lived in this world
00:00:15.740 | where we had persistently really low inflation, right?
00:00:18.940 | After the financial crisis through the aughts
00:00:21.280 | into the teens, whereby like 2019,
00:00:24.820 | we were in this world where unemployment was super low,
00:00:27.480 | the economy was doing well,
00:00:28.700 | the government was borrowing tons of money,
00:00:31.260 | and all of those things
00:00:32.100 | you would think would give you higher inflation, right?
00:00:34.380 | That classically is a really inflationary environment
00:00:36.980 | and we didn't see it.
00:00:38.380 | And part of the reason it seems,
00:00:40.420 | it's a mystery why we didn't see it,
00:00:41.620 | but part of the reason it seems
00:00:43.500 | is because people expected it would stay low.
00:00:46.580 | So now, what do people think?
00:00:48.100 | I mean, you can look at the markets,
00:00:50.140 | you can look at various financial markets
00:00:51.980 | and people don't think inflation's gonna stay at 8%
00:00:54.580 | for like five years.
00:00:55.500 | So I'm hoping people's expectations
00:00:57.380 | are still kind of moderate.