Americans prepare to higher inflation pressures in coming years and an acceleration of house price growthaccording to a report published this Monday by the Federal Reserve Bank of New York.
In its latest Survey on the Consumer Expectationsthe bank points out that respondents They foresee inflation of 3.3% within a year, compared to the 3% they anticipated in March, while inflation three years ahead will moderate to 2.8%, compared to 2.9% the previous month. Five-year inflation stood at 2.8%, compared to 2.6% in March.
The Federal Reserve’s inflation target is 2%, and the personal consumption expenditure price index, the central bank’s preferred inflation indicator, stood at 2.7% year-on-year in March, compared to 2.5% in February.
In the survey, participants also noted that They expected elevated price pressures within a year in all measured categories, including rent, food, gasoline and medical expenses.
The expected increase in housing prices one year from now it reached its highest level since July 2022, with an increase of 3.3%, compared to 3% in the previous seven months.
Although the report revealed that respondents expected lower profits and income in the future, it also indicated that future spending would increase. It was also observed that households were more concerned about their personal financial situation, although they were more optimistic about their access to credit.
Consumer expectations about the labor market in the US
The survey also found conflicting opinions on the working market, with the lowest level of respondents saying they could get a job if they lost one since April 2021.
The New York Fed report comes at a time when the Fed is trying to make sense of the unexpectedly tight price pressures from earlier in the year. This outlook is complicating officials’ expectations of being able to cut interest rates this year.
The increase in the expected path of prices in the short and long term makes prospects even more difficult, since Federal Reserve officials and many private sector analysts believe that the direction the public expects inflation to take in the future greatly influences its current situation.
In a separate report, The Cleveland Federal Reserve noted that business owners’ inflation expectations increased in the second quarterand that executives believe the consumer price index will rise 3.8% in the next year, compared to the 3.4% expected in the first quarter.
Source: Ambito
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