Abstract
Food prices are among the most visible indicators of inflation, playing an important role in shaping how Americans perceive the economy. This study examines the relationship between food prices, inflation expectations, and consumer sentiment. Using monthly data from 1982 to 2024, we show that food-away-from-home prices trigger sharper but short-lived responses in inflation expectations, while food-at-home prices have more persistent effects. Moderate inflation expectations are linked to higher consumer sentiment, suggesting that stable food prices can help anchor confidence. The findings underscore the importance of breaking down and understanding the food price components of inflation and offer insights for policymakers managing economic uncertainty.