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NY Fed 1Y and 3Y Inflation Expectations At Lows Since 2020

US DATA
  • 1Y expectations fell to 3.01% in Dec from 3.36% for its lowest since Dec’20.
  • 3Y expectations fell to 2.62% in Dec after three months at 3.0%, poking below the 2.66% in Feb’23 for its lowest since Jun’20.
  • The 1Y remains about 40bps above its 2019 average despite falling further on the month, but the 3Y is back in line with its pre-pandemic average.
  • 5Y expectations fell 0.2pps to 2.5% for the lowest since March, a series that only started in Jan’22.
  • The latest moderation in 3Y and 5Y rates has been at a faster pace than the 5-10Y measure in the U.Mich survey, which has pulled back but only to a still rangebound 2.9%.

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