Although the Federal Reserve continues to insist that any sign of growing price pressures are only temporary and will subside once the US economy returns to normality, Americans appear to have a differing viewpoint.
According to the latest New York Survey of Consumer Expectations, median inflation expectations for the next 12 months rose to 4.8%, marking a 0.8% increase from the month prior, and the highest on records dating back to 2013. Although the outlook for the next three years remained relatively unchanged at 3.6%, it is still significantly above the Fed’s 2% inflation target.
Albeit year-ahead inflation expectations soared to a new high, the survey found that Americans’ views on price pressures for several key items may have softened. Consumers now forecast that food prices will increase by 7.1% rather than 8%, and that gasoline prices will rise by only 9.2% in 2022, down from May’s consensus of 9.8%.
However, despite the potential of price pressures alleviating for some categories, prices across America’s housing sector are expected to continue on their upward trend. The NY Fed’s survey found that the median home price change expectations for the year-ahead sat at 6.3% in June, which is significantly higher than the 12-months trailing average of 3.7%.
Information for this briefing was found via the NY Fed. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.