Near-Term Inflation Expectations Remain Stable, Spending Plans Soften
In January, the U.S. public's short-term inflation expectations remained largely unchanged, according to the latest Survey of Consumer Expectations from the Federal Reserve Bank of New York.
* One-year and three-year inflation expectations remained at 3%.
* Five-year inflation expectations rose slightly to 3%, up from 2.7% in December.
However, respondents also anticipated increased future price increases for:
* Food
* Gasoline
* Rent
* College
* Medical costs
Home price expectations rose to 3.2% from December's 3.1%.
The New York Fed report contrasts with a University of Michigan survey released earlier that found a significant increase in year-ahead inflation expectations, from 3.3% in January to 4.3% in February.
Overall, the data suggests that inflation expectations have remained relatively stable despite rising prices for some goods and services.
While the Cleveland Fed predicts weaker inflation pressures over the next year, the New York Fed survey shows a mixed outlook for consumer spending.
* Expected change in future household spending decreased to 4.4% in January, the lowest since January 2021.
* Perceptions of personal finances slipped, while perceptions of credit access improved.
The report highlights the ongoing uncertainty surrounding inflation and the potential impact of government policies. Federal Reserve officials believe that inflation expectations play a significant role in actual price pressures.