The upward bias appears to be generated because households’ inflation expectations are heavily affected by price movements – for example, daily necessities and gasoline. Of course, it is also important to consider firms’ inflation expectations because they ultimately set their own sales prices and wages.
However, to maintain their profit margins, firms are unable to continue raising sales prices at the expense of suppressing demand for their goods and services. Therefore, I think that the most important determinant of the CPI is likely to be households’ perception of prices and their inflation expectations.