Former Kansas City Federal Reserve Bank President and CEO Thomas Hoenig joined ‘Mornings with Maria’ to discuss the Federal Reserve’s forthcoming rate hike decision.
Americans are bracing for higher inflation over the next few years even as they anticipate a drop in consumer prices over the short term, according to a key Federal Reserve Bank of New York survey published Monday.
The median expectation is that the inflation rate will be up 3.8% one year from now, according to the New York Federal Reserve's Survey of Consumer Expectations, down from a high of 7.1% recorded in June 2022. It marks the lowest reading since April 2021.
But consumers anticipate that inflation will remain sticky in coming years, according to the survey, estimating that inflation will hover around 3% three years from now and remain steady at 3% five years from now. By comparison, central bank policymakers projected in their latest economic forecasts that inflation will fall to 2% by 2025.
FED OFFICIALS SIGNAL MORE RATE HIKES TO COME, MEETING MINUTES SHOW
Americans expect the cost of homes, college tuition, medical care and rent to increase over the next year, but they projected declines in the price of gasoline and food.
A shopper looks at organic produce at a supermarket in Montebello, California, on Aug. 23, 2022. ((Photo by FREDERIC J. BROWN/AFP via Getty Images) / Getty Images)
The survey, which is based on a rotating panel of 1,300 households, plays a critical role in determining how Fed policymakers respond to the inflation crisis. That is because actual inflation depends, at least in part, on what consumers think it will be. It is sort of a self-fulfilling prophecy – if everyone expects prices to rise by 3% in the year, that signals
Read more on foxbusiness.com