Indeed, the most recent readings on inflation expectations from the University of Michigan Survey Research Center showed a noticeable decline in September, especially in the inflation rate expected twelve months ahead. In financial markets, the spread of nominal over indexed yields has also retreated substantially at the near end of the yield curve.
To a monetary policy maker focused on the evolution of inflation expectations, these developments are indeed steps (albeit small) in the right direction. Another major force driving up core consumer price inflation over the past year has been shelter costs, especially tenants' rent and owners' equivalent rent.