Americans' inflation expectations creep higher again, key NY Fed survey shows
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 3.2% one year from now, according to the New York Federal Reserve's Survey of Consumer Expectations, down slightly from the 3.3% reading recorded in April.
But consumers anticipate that inflation will remain high in the coming years. The three-year-ahead expectation held steady at 2.8%, while the five-year-ahead expectation jumped to 3% from 2.8% the previous month, according to the survey.
That remains above the Fed's 2% target, indicating that 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)
While Americans think that inflation will decline slightly over the next year, they expect the cost of necessities such as gas, food and rent will be unchanged. They are also anticipating a sharp 0.4% rise in the price of medical care, to 9.1%, and a 0.6% drop in the cost of college, to 8.4%.
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.
FED'S FIGHT AGAINST
Read more on foxbusiness.com
