High inflation risks further trend drift: Fed paper

History shows that episodes of high trend inflation tend to be followed by periods of large drift in price levels, according to a Federal Reserve paper published on Thursday.

Elmar Mertens, the paper's author, presents estimates of trend inflation, based on information contained in survey expectations, the term structure of interest rates, and realised inflation rates, to assess whether inflation expectations are anchored. He also estimates uncertainty surrounding future changes in trend