New York Fed survey showed US inflation expectations rose to another record level – News Couple

New York Fed survey showed US inflation expectations rose to another record level

Americans inflation Fears continued to accelerate in October, as they climbed for the 12th consecutive month to another record high, according to a major source. Federal Reserve The Bank of New York survey was published Monday.

The median expectation is that inflation will rise 5.4% a year from now, the highest level for the measure since its launch in June 2013, according to the New York Federal Reserve’s Survey of Consumer Expectations. Inflation expectations over the next three years remained unchanged at an average of 4.2%, a sequential rise.

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The survey stated that “uncertainty about average inflation – or uncertainty about future inflation outcomes – increased in the short and medium term. Both measures reached their highest levels in October.”

As consumers prepare for the highest levels of inflation in nearly a decade, they also expect the prices of things like food, gasoline, rent and college tuition to rise over the next year. The only things Americans expect to get cheaper over the next year are home prices and Medicare.

The report is based on a rotating board of 1,300 households.

Federal Reserve President Jerome Powell The rise in consumer prices is largely due to pandemic-induced disruptions in the supply chain, labor shortages that have driven wages higher, and a wave of pent-up consumers pouring in stimulus cash.

Although Powell has repeatedly said that the rise in inflation is likely to be “temporary,” he acknowledged last week during the Fed’s two-day policy-setting meeting that the increase may not abate until the latter half of 2022. He emphasized that the wild volatility in Consumer prices will stop once the current pressures on the supply chain dissipate.

“Our baseline forecast is that supply bottlenecks and shortages will continue well into next year and inflation will also rise,” Powell told reporters. “That is, as the pandemic subsides, supply chain bottlenecks will ease and job growth will pick up again. With that happening, inflation will drop from today’s highs.”

His comments came after the Federal Open Market Committee voted to start rolling back the extraordinary stimulus it has provided to the economy since March 2020. The US central bank announced that it would cut its aggressive bond-buying program by $15 billion per month in mid-November, cutting its purchases of long-term Treasuries. by $10 billion a month and its purchases of mortgage-backed securities by $5 billion a month.

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Powell stressed that Fed policy makers will wait for supply chain disruptions to dissipate and inflation to slow before raising rates.

“We will be patient,” he said. “If the need arises, we will not hesitate.”

The Bureau of Labor Statistics is scheduled to release its latest CPI data on Wednesday at 8:30 a.m. ET.

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