1/2 * Blue is the public's view of inflation expectations. It is very high. The Fed might describe it as "unanchored." * Orange is the outlook from bond traders. It remains "well contained" in Fed Speak. Powell includes this standard language near the beginning of every press conference. Here is the October 29, 2025, version. We understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public mission. We at the Fed will do everything we can to achieve our maximum employment and price stability goals. Which measure should matter more to the Fed? We would argue the public's view. Powell's repeated explanation of how the Fed works should lead him to agree.

2/2 But if you want to say both are equally important, then the Fed has a measure that combines the inflation expectations measures above with several others, called "Common Inflation Expectations" (CIE). It peaked in June 2022 when YoY CPI was 9%. This year, the CIE has nearly returned to this peak level. On Wednesday, Powell will say "measures of inflation expectations remain contained." As I've said earlier, just because he properly pronounces all these world records correctly doesn't make it so. He needs to explain in detail why this is and why it allows him to cut rates, as the country is raging about affordability. The Fed has plenty of measures (including the public's view above in blue and the all-encompassing CIE below in green) that align with public anger about affordability. Why did they elect to ignore these warning signs and cut rates by 150 basis points since September 2024 (about to be 175 basis points this week)?