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Sharp Decline In 3Y Inflation Expectations, Delinquencies Expected To Rise Further - NY Fed

US DATA
  • NY Fed inflation expectations were unchanged for 1Y and 5Y ahead measures (1Y unchanged on a rounded basis at 3.0% but unrounded at 2.97% after 3.02%, 5Y at 2.8%).
  • However, the 3Y saw a sharp 0.6pp decline from 2.93% to 2.33%, poking below the 2.35 in January for a low since the series started in 2013.

Elsewhere in the consumer survey (full here):

  • “Delinquency expectations increased, with the average perceived probability of missing a minimum debt payment over the next three months increasing by 1.0 percentage point to 13.3 percent, its highest level since April 2020.”
  • “Labor market expectations came in mixed, with respondents’ median one-year-ahead expected earnings growth declining by 0.3 percentage point to 2.7 percent. However, the mean expected likelihood that the U.S. unemployment rate will be higher one year from now decreased by 1.0 percentage point to 36.6 percent.”

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