Americans' inflation expectations creep higher again, key NY Fed survey shows
What are the Federal Reserve's projected inflation rates for 2025 and 2026?
According to the Federal Reserve's latest economic forecasts, inflation is projected to fall to 2.1% by 2025 and eventually settle at around 2% in 2026. These projections are based on the assumption that the central bank will continue to implement appropriate monetary policy measures to achieve its 2% inflation target over the longer run. It is important to note that these projections are subject to change as economic conditions evolve and new data becomes available.
How have the three-year and five-year ahead inflation expectations changed according to the latest survey?
According to the latest New York Federal Reserve's Survey of Consumer Expectations, the three-year ahead inflation expectation remained steady at 2.8%. However, the five-year ahead inflation expectation increased to 3.0% from 2.8% in the previous month. This indicates that consumers anticipate inflation will remain high in the coming years, above the Federal Reserve's 2% target.
What are the anticipated changes in the costs of medical care and college tuition as per the survey?
According to the New York Federal Reserve's Survey of Consumer Expectations, consumers anticipate a sharp 0.4% rise in the price of medical care, to 9.1%, and a 0.6% drop in the cost of college, to 8.4%.