Americans expect high inflation to stick around in latest NY 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 3.3% one year from now, according to the New York Federal Reserve's Survey of Consumer Expectations, an increase from the 3% rate recorded the previous month.
Consumers also anticipate that inflation will remain abnormally high in the coming years, projecting that it will hover around 2.8% three years from now and remain there five years from now – an increase from March's 2.6%, 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 at around 2% in 2026.
POWELL SAYS FED WON'T RUSH TO CUT INTEREST RATES UNTIL INFLATION IS CONQUERED
A woman shops for groceries at a supermarket in Monterey Park, California, on Oct. 19, 2022. ((Photo by FREDERIC J. BROWN/AFP via Getty Images) / Getty Images)
Americans expect the cost of gasoline, food, medical care, college and rent to rise in the year ahead. They also anticipate that median home price growth will rise to 3.3%, the highest reading in the series since July 2022.
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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