Americans expect high inflation to linger in latest New York Fed survey
foxbusiness.comFormer Kansas City Federal Reserve Bank President Thomas Hoenig reacts to Jerome Powell saying the Fed is not ready to start cutting rates on 'Cavuto: Coast to Coast.'
Americans are bracing for high inflation to stick around over the next few years, according to a key Federal Reserve Bank of New York survey published Monday.
The median expectation is that the inflation rate will be up 3% one year from now, according to the New York Federal Reserve's Survey of Consumer Expectations, unchanged from the previous months.
Consumers also anticipate that inflation will remain abnormally high in the coming years, projecting that it will hover around 2.7% three years from now – up from January's 2.4% – and rise even further to 2.9% five years from now, according to the survey.
That remains above the Fed's 2% target, indicating that sticky inflation could be here to stay. By comparison, central bank policymakers projected in their latest economic forecasts that inflation will fall to 2.1% by 2025 and eventually settle around 2% in 2026.
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A woman shops for groceries at a supermarket in Monterey Park, California on October 19, 2022. ((Photo by FREDERIC J. BROWN/AFP via Getty Images) / Getty Images)
Americans expect the cost of gasoline to rise slightly over the next year. However, they predicted the price of other necessities like medical care and rent to fall in the year ahead. Consumers anticipate that the cost of groceries will remain unchanged at 4.9%.
The survey, based on a rotating panel of 1,300 households, plays a critical role in determining how Fed policymakers respond to the inflation crisis.
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