MNI BRIEF: 5-Yr Inflation Expectation Highest Since May-NY Fed
MNI (WASHINGTON) - Inflation expectations in January remained unchanged at the short- and medium-term horizons but the longer term measure jumped three tenths to the highest since May, according to the New York Fed's monthly survey of consumers Monday.
Median year-ahead inflation expectations were unchanged at 3.00% and the three-year-ahead measure stood at 2.99%. The five-year-ahead measure increased 0.26pp to 2.98%. Several Fed officials in recent weeks have said they are especially focused on inflation expectations and emphasized the need to keep expectations well anchored after the surge in inflation following the pandemic.
Year-ahead commodity price expectations also rose across the board, gas prices increasing by 0.6 pp to 2.6%, food up 0.6 pp to 4.6%, medical care up 1.0 pp to 6.8%, college up 0.2 pp to 5.9%, and rent up 0.5 pp to 6.0%.
Median household spending growth expectations fell 0.4 pp to 4.4%, its lowest reading since January 2021, a broad-based decline across age, income, and education groups. That measure remains above pre-pandemic levels, the NY Fed said. (See: MNI INTERVIEW: US Services Prices Trending Upward-ISM's Miller)