The Federal Reserve Board's Index of Common Inflation Expectations, an internal gauge of longer run inflation expectations constructed from two dozen other indicators, eased slightly but remained near record highs at 2.3% in the third quarter.

The CIE Index eased 0.03pp from a series high of 2.33% in the second quarter. That reading was an upward revision from an initial Q2 print of 2.19%. The series, which combines market and survey measures into a single view of how households and businesses expect prices to behave over the next decade, goes back to 1999 and the index methodology was updated earlier this year.

An alternative CIE index, projected onto Michigan's survey of consumers expectations over the next 5-10 years also eased in the third quarter, falling 0.06pp to 3.22% from the second quarter. Fed officials have cited the index on occasion this year as justification for a historically fast hiking cycle, with Chair Jerome Powell noting the CIE index as one reason for the supersized 75bp rate hike in June. Former Fed officials and economists have told MNI they expect another 75bp hike at the November FOMC meeting.

Source: Federal Reserve