American consumers expect high inflation levels to persist based on NY Fed survey findings
- The NY Fed survey revealed that American consumers anticipate inflation to remain at elevated levels in the upcoming years.
- Inflation in the U.S. rose by 3.3% in May compared to last year, a figure lower than economists' predictions.
- Experts warn of continued high inflation impacting American households in the future.
Price increases in the U.S. were up 3.3% from last year in May's Consumer Price Index, a smaller increase than predicted by economists. Americans anticipate high inflation to persist over the next few years, with expectations that the inflation rate will be up 3.2% one year from now. Consumers expect the cost of necessities like gas, food, and rent to remain unchanged. The New York Federal Reserve's Survey of Consumer Expectations plays a crucial role in how Fed policymakers respond to the inflation crisis, as actual inflation partly depends on consumer expectations. Fed Chair Jerome Powell emphasized the commitment to bringing inflation back to the Fed's 2% target goal before considering reducing interest rates. Recent inflation figures suggest a longer timeline to achieve the confidence needed to adjust monetary policy. The New York Fed survey also indicates growing optimism about the labor market, with Americans feeling more hopeful about finding a new job if needed. Policymakers are expected to maintain interest rates at the highest level in 23 years, with investors closely monitoring for hints on the timing of the first rate cut.