Slatestone Wealth chief market strategist Kenny Polcari says Americans are reconsidering what the CPI report means on 'Making Money.'
Americans are feeling more optimistic about the odds that high inflation will continue to cool 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 3.5% 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.
Consumers also anticipate that inflation will keep declining in the coming years, according to the survey, estimating that it will hover around 2.9% three years from now and remain steady at 2.9% five years from now.
INFLATION ROSE 3.2% IN JULY AS PRICES TICK HIGHER FOR FIRST TIME IN A YEAR
A man shops at a Safeway grocery store in Annapolis, Maryland, on May 16, 2022. (Jim Watson/AFP via / Getty Images)
Still, that remains well 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% by 2025.
«The decline at the one-year-ahead horizon was broad based across demographic groups and the July reading is the lowest since April 2021,» the survey said. «The survey’s measure of disagreement across respondents decreased at all three horizons.»
Americans expect the cost of most items and services including homes, college tuition, medical care, rent, gasoline and food to fall over the next year.
The survey, which is based on a rotating panel of 1,300 households, plays a critical role in determining how Fed
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