You must have seen this term in the news quite often. Inflation is the indicator of price levels in the economy. So, as the name suggests, inflation expectations are the expected price levels in the future. If inflation expectations are high, actual inflation will tend to be high in future because companies would want to raise prices and workers will seek higher wage rises. If expectations are low, actual inflation is likely to be stable and it will be easier for the Reserve Bank to manage the policy. Both the fiscal and monetary authorities need to work together to anchor inflation expectations. Households' inflation expectations have risen for three months ahead, showed RBI's latest survey.