US consumer inflation expectations decline again, says New York Fed

Share your love

U.S. consumer inflation expectations fell further in August as gasoline prices extended their steep decline from June’s all-time high, a development likely to be welcomed by policymakers. of the Federal Reserve evaluating how big the interest rate hike will be for next week.

Consumers in August saw inflation of 5.75% over the next 12 months, down from 6.2% in July and the lowest rate since October 2021, the Fed’s monthly survey of consumer expectations showed on Monday. from New York. They also forecast price increases of an average of 2.8% over the next three years, the slowest pace since the end of 2020, after 3.2% in July.

Those results may provide some relief to central bank policymakers who have been concerned that the highest inflation in 40 years could alter consumers’ perceptions of how entrenched current price shocks may be, making it difficult to further work to contain inflation.

Markets expect the Federal Open Market Committee, the Fed’s monetary policy-setting panel, to raise the benchmark overnight lending rate again from the current range of 2.25%-2.50% at its meeting. September 20 and 21.

The Fed has made consecutive rate hikes of 75 basis points, and contracts in the futures markets tied to Fed funds expectations are predicting a third hike of that magnitude next week.

The survey also brought some optimistic news for the labor market, which Fed officials expect will weaken somewhat as interest rates rise to dampen activity and overall demand.

Consumers who responded to the New York Fed’s questionnaire in August saw a lower chance of losing their job next year than in July and a higher chance of finding a new job if they lose their current one. Additionally, the percentage of people who consider it likely to quit their current job fell to the lowest level since March 2021.

Read Also   China deploys a record number of 56 aircraft near Taiwan in one day and almost 150 in the last few days, why and what does Taipei say?
Share your love

Leave a Reply

Your email address will not be published. Required fields are marked *