People often process numbers in simplified ways. One such simplification is left-digit bias, the tendency to give more weight to the leftmost digit of a number. We study whether this bias affects how households process inflation numbers when forming inflation expectations. Using cross-country data and a regression discontinuity design, we show that expectations jump when inflation crosses round-number thresholds, particularly multiples of five, but only when inflation is rising. A randomized controlled trial confirms these findings. Embedding the bias in a New Keynesian model reveals weaker initial but more persistent responses to a cost-push shock, requiring more persistent monetary policy.