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MNI: US Longer Term Consumer Price Expectations Tick Up-NY Fed

Household spending expectations saw largest one month decline on record in New York Fed survey.

Consumer expectations for longer term inflation ticked up in September with three-year-ahead expectations up 0.1ppt to 2.9% and five-year-ahead expectations up 0.2ppt to 2.2%, according to a monthly Federal Reserve Bank of New York survey of consumers published on Tuesday.

However, median one-year ahead inflation expectations fell 0.3ppt to 5.4%, its lowest reading since September 2021, according to the survey. Fed officials have pointed to anchored long-run inflation expectations in moving inflation back to target without having to generate an inordinate amount of slack in the economy. Expectations of home prices declined slightly by 0.1ppt to 2.0%, its lowest reading since June 2020, but expectations for year-ahead gas, food, college education, and rent prices increased. (See: MNI INTERVIEW: Easing Price Expectations Little Comfort-UMich)

Household spending expectations fell sharply from 7.8% to 6.0% in September, posting their largest one month decline since the series’ inception in June 2013, even as median expected growth in household income was unchanged in the month at its series high of 3.5%.

Source: New York Fed

MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com
MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com

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