Fomoflation is a term used to describe a type of inflation caused primarily by consumer behavior and market psychology, rather than traditional macroeconomic factors.
 
Key Features of Fomoflation

• It arises from behavioral psychology and social influences, often amplified by social media.
• It triggers a cycle of panic buying and artificial demand, prompting prices to surge faster than supply or underlying economic conditions would allow.
• Examples include sudden demand spikes for staples like pulses and cooking oil during festive seasons due to media reports about shortages or price hikes.
• An illustrative recent instance was when the U.S. increased the visa fee to $100,000, which led to panic-driven demand and price surges in ticketing.

Unlike regular inflation driven by macroeconomic factors like interest rates, currency exchange, or production costs, fomoflation is psychological and driven by herd behavior, perceptions, and fear, often intensified by social media and news reports.

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