Americans see inflation rising again in the long term, key NY Fed survey shows
Former 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 remain 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% one year from now, according to the New York Federal Reserve's Survey of Consumer Expectations, unchanged from the previous months.
Consumers also anticipate that inflation will remain high in the coming years, projecting that it will hover around 2.9% three years from now – up from February's 2.7% and January's 2.4%. However, they expect that inflation will cool to 2.6% five years from now, according to the survey.
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 2.1% 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 the inflation outlook for the next year has held steady, Americans expect the cost of necessities such as food, gasoline, medical care, rent and college tuition over the next 12 months.
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 INFLATION IS WEIGHING ON MIDDLE-CLASS AMERICANS
That is because actual
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