Consumer expectations for inflation fell sharply in July from the previous month, according to a monthly Federal Reserve Bank of New York survey of consumers.
Median one-year ahead inflation expectations fell to 6.2% from 6.8%, while the three-year ahead measure dropped to 3.2% and 3.6%, according to the survey. The decreases were largest among lower-income and lower educated respondents.
Median five-year ahead inflation expectations also declined to 2.3% from 2.8% a month earlier.
"After being stable at 3.0% during the first three months of the year, the series has been trending down," the New York Fed said.