Americans' inflation expectations fall to lowest level in 2 years, NY Fed survey shows
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 in the coming months, according to a key Federal Reserve Bank of New York survey published Monday.
The median expectation is that the inflation rate will be up 3.4% 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 it will take longer for price growth to slow in the longer term, according to the survey, projecting that inflation will hover around 3% three years from now and at 2.7% five years from now.
RISING CHILD CARE PRICES STARTING TO BITE US FAMILIES
A man shops at a Safeway grocery store in Annapolis, Maryland, on May 16, 2022. (Jim Watson/AFP via / Getty Images)
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% by 2025.
«Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—fell at the one-year ahead horizon, increased slightly at the three-year ahead horizon, and remained unchanged at the five-year ahead horizon,» the survey said.
Americans expect the cost of most items and services including homes, college tuition, 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 policymakers respond to the inflation
Read more on foxbusiness.com
