financetom
Economy
financetom
/
Economy
/
NY Fed: Consumer outlook on longer-term inflation hit snag in February
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
NY Fed: Consumer outlook on longer-term inflation hit snag in February
Mar 11, 2024 8:29 AM

NEW YORK (Reuters) - The public's expectations around the longer-run trajectory of inflation deteriorated in February, a report from the Federal Reserve Bank of New York said Monday.

While inflation a year from now was seen holding steady at 3%, respondents to the bank's latest Survey of Consumer Expectations said that they see inflation three years from now moving to 2.7% from January's 2.4%, with inflation in five years at 2.9%, from the prior month's 2.5%.

The rise in the three-year expected rate of inflation was the first month-over-month gain since last September, while the month-over-month rise in the five year was the first since last August.

The deterioration in longer-run inflation expectations is likely to unsettle Federal Reserve officials, who are now in the preparation phase for their March 19-20 Federal Open Market Committee meeting. While Fed officials are almost certain to hold rates steady at the gathering, many policy makers have said they expect to cut rates at some point later this year as inflation pressures have been moderating back toward the 2% target.

Fed officials believe that where the public expects inflation to go strongly influences where it stands today. They've repeatedly flagged the relative stability of longer-term expectations as a reason they are confident inflation will return to the target.

Officials have also warned the road to lower inflation will likely be uneven and bumpy. Some recent inflation data has proven stronger-than-expected, which may have influenced the recent round of expectations data.

Despite the shift in longer-run expectations some of the details of what the public projects for price pressures was more benign. Survey respondents said they see ebbing price rises for medical care and college while future food price gains were seen holding steady.

Respondents saw last month a decline in year-ahead rent price gains to 6.1% from January's 6.4%, the lowest reading since December 2020. Home price increases were seen flat at 3% and gasoline prices were seen rising only modestly compared to January at 4.3%.

The report also found that those who most strongly projected rises in longer run inflation expectations had at best high school degrees, while noting a declining overall disagreement about the future path of inflation.

Survey respondents in February held steady on their expectations for future income and earnings growth, while boosting their spending expectations. Respondents were a little more downbeat on job market prospects and said last month that their views on credit access had also sagged.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Daily Roundup of Key US Economic Data for Feb. 19
Daily Roundup of Key US Economic Data for Feb. 19
Feb 19, 2025
02:35 PM EST, 02/19/2025 (MT Newswires) -- Housing starts fell by 9.8% to a 1.366 million annual rate in January, with single-family housing starts and multi-family starts both lower. Building permits rose by 0.1% to a 1.483 million rate in January. Single-family permits were unchanged, while multi-family permits were up slightly. Homes permitted but not started increased by 1.4%, suggesting...
Potential impact of Trump policies raised inflation concerns at Fed, minutes show
Potential impact of Trump policies raised inflation concerns at Fed, minutes show
Feb 19, 2025
WASHINGTON (Reuters) - President Donald Trump's initial policy proposals stoked concern at the Federal Reserve about higher inflation, with firms telling the U.S. central bank they generally expected to raise prices to pass through the cost of import tariffs, policymakers said at a meeting held about a week after Trump's January 20 inauguration. Participants at the U.S. central bank's January...
Federal Reserve Watch for Feb. 19: FOMC Minutes Hint at Extended Pause in Rate Cuts as Inflation Remains Elevated
Federal Reserve Watch for Feb. 19: FOMC Minutes Hint at Extended Pause in Rate Cuts as Inflation Remains Elevated
Feb 19, 2025
02:37 PM EST, 02/19/2025 (MT Newswires) -- Minutes of the Jan. 28-29 FOMC meeting showed that participants believed they were 'well positioned' to pause rate reductions given the uncertainty of the fiscal policy outlook and still elevated inflation. The minute said that the FOMC would like to see further progress on inflation before considering further rate reductions, particularly given the...
US Equity Indexes Search for Direction as Geopolitics, Tariffs Sap Risk Sentiment
US Equity Indexes Search for Direction as Geopolitics, Tariffs Sap Risk Sentiment
Feb 19, 2025
01:09 PM EST, 02/19/2025 (MT Newswires) -- US equity indexes were mixed in choppy midday trading Wednesday as investors weighed geopolitical risks and punitive import tariffs amid a steeper-than-forecast slump in housing starts. The Nasdaq Composite and the S&P 500 at their respective 20,031.7 and 6,131.2 levels changed little after trading lower earlier in the session. The Dow Jones Industrial...
Copyright 2023-2025 - www.financetom.com All Rights Reserved