Americans see high inflation sticking around in latest New York Fed survey
Slatestone Wealth chief market strategist Kenny Polcari says Americans are reconsidering what the CPI report means on 'Making Money.'
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 Tuesday.
The median expectation is that the inflation rate will be up 3.7% 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. That marks a slight increase from the 3.6% recorded last month.
Consumers also anticipate that inflation will remain high in the coming years, estimating that it will hover around 3% three years from now – up from August's 2.8% – and fall slightly to 2.8% five years from now, according to the survey.
US FEDERAL BUDGET DEFICIT PROJECTED TO DOUBLE THIS YEAR
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 2.2% by 2025 and eventually settle around 2% in 2026.
Americans expect the cost of food to rise over the next year. However, they predicted the price of necessities like gas, medical care and rent will continue to fall in the year ahead.
WHOLESALE INFLATION SURGES MORE THAN EXPECTED IN AUGUST
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.
Shoppers walk through the milk and cream section of a supermarket in Montebello, California, on Aug. 23,
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