Latest news with #SurveyofConsumerExpectations
Qatar Tribune
2 hours ago
- Business
- Qatar Tribune
US inflation expectations ease in May, New York Fed survey shows
Agencies Americans' anxiety about the future path of inflation eased in May, as they also grew more upbeat about the state of their personal finances, according to a report released on Monday by the New York Federal Reserve. The regional Fed bank reported in its Survey of Consumer Expectations that the outlook for inflation across all the horizons it measures retreated last month. A year from now, survey respondents see inflation at 3.2% versus 3.6% in April, while three years from now it's expected to be 3% versus 3.2%. Five years from now, inflation is projected to be 2.6%, compared to expectation of 2.7% in the survey for report found that respondents are expecting moderating price gains for gas, rent, medical care and college, while food costs a year from now are seen rising at a 5.5% rate, which would be the highest level since October 2023. Meanwhile, in May the year-ahead expected rise in house prices stood at 3%, down from 3.3% in moderation in the inflation outlook took place against a background of high uncertainty over the future of price pressures. Huge and ever-shifting tax hikes on imports imposed by the Trump administration are broadly expected by economists and policymakers to push up inflation, while depressing hiring and growth. The major question is whether the gain is a one-off or the makings of something more been little clarity on how much those tariffs will impact the economy, especially as President Donald Trump raises and lowers his import levies unpredictably. The survey period for the New York Fed report overlapped with some of the biggest shifts on tariffs, and the moderation in the readings for May will likely bolster officials' confidence that inflation is not gearing up for an extended breakout to higher levels. The Fed will almost certainly leave its benchmark interest rate steady in the 4.25%-4.50% range at the end of its June 17-18 policy meeting. Inflation remains above the U.S. central bank's 2% target and is not expected to moderate to desired levels soon, in an otherwise healthy economy. The New York Fed report also found that households upgraded their views on their incomes, earnings, hiring prospects and survey found households had 'slightly' improved views on their current financial situation in May, as respondents said access to credit improved relative to last year, while expectations of missing a debt payment declined.
Yahoo
6 hours ago
- Business
- Yahoo
Price Fears Easing Amid Tariff Negotiations
Consumer worries over price increases eased in May as inflation expectations fell by the largest margin since 2023 in the latest New York Federal Reserve survey of consumers. Year-ahead inflation expectations came in at 3.2% in May, reflecting declines in similar consumer surveys. The Federal Reserve monitors inflation expectations when setting interest-rate policy, as consumer attitudes over prices can help influence the path of inflation. Economists have said that while consumers are feeling rotten about how tariffs may affect prices, their attitudes have improved as more news over pauses in tariffs and trade negotiations trickles tariff threats easing and reports of trade negotiations trickling in, consumers are worrying less about the threat of inflation from the trade tensions of recent months. After surging higher in March and April over worries that tariffs will drive up prices, consumer inflation expectations in May declined in the New York Federal Reserve's Survey of Consumer Expectations. Consumers expect price increases in the year ahead to come in at 3.2%, a drop by 0.4 percentage point from last month's survey, the largest decline in inflation expectations since December 2023. They also saw inflation falling at three and five years out. The decline in inflation expectations mirrors similar sentiment detected in other consumer surveys, which improved as some tariffs are paused and negotiations between trade partners begin to ramp up. The Federal Reserve closely follows inflation expectations when considering interest-rate decisions, because consumer behavior can help affect the direction of price increases. Consumers who expect prices to go up often act in ways that help make that a reality. After President Donald Trump began slapping tariffs on trade partners after taking office this year, inflation expectations shot higher. The closely watched Michigan Survey of Consumers saw year-ahead inflation expectations move as high as 6.6% in the final May survey. Inflation expectations reached 3.6% in the March and April surveys of the New York Federal Reserve before falling in May. The improving expectations come as tariff policy has seesawed, but last month's survey takes into account the May 12 action by Trump to temporarily reduce tariffs on China to 30% from 145% amid talks then between U.S. and Chinese officials. Economists said that while tariffs may have put a scare in some consumers, that hasn't shown up in economic data, with retail sales remaining healthy and inflation moving lower in the latest April data. While trade headlines can spook consumers, they may not be having a lasting impact, wrote BMO Chief Economist Douglas Porter on May's consumer surveys. 'There's little debate that the heavy trade clouds will linger, but there is a growing sense that markets and the economy can deal with that uncertainty better than initially expected,' Porter wrote. While consumers may be feeling a bit less worried about tariffs, it will take more good news on tariffs to keep the vibes going, wrote Oren Klachkin, a financial market economist for Nationwide. 'Consumers' inflation expectations will likely remain susceptible to forthcoming tariff news,' Klachkin wrote. Read the original article on Investopedia
Axios
9 hours ago
- Business
- Axios
Fed survey: Americans more optimistic about inflation as trade tensions cool
Consumer inflation expectations fell in May for the first time in 2025, according to a survey by the New York Federal Reserve released on Monday. Why it matters: In recent months, Americans anticipated tariff-related price hikes would result in soaring inflation. Those fears receded somewhat as the Trump administration announced a temporary trade truce with China. The big picture: Economic policymakers track inflation expectations closely. If consumers expect higher inflation, it could affect their behavior. That in turn could be the start of a feedback loop that keeps inflation pressures embedded in the economy. The intrigue: The New York Fed survey data is the latest to suggest that consumers are directly tying inflation expectations to the trade war, raising expectations as trade tensions ramp up, and reversing them amid signs of tariff relief. By the numbers: Inflation expectations for the year-ahead fell by 0.4 percentage point to 3.2% last month, according to the regional bank's Survey of Consumer Expectations. That drop was mirrored across longer time horizons: inflation expectations declined by 0.2 percentage point to 3% in the three-year-ahead period, too. Even before Monday's data, inflation expectations in the long term did not match the short-term gauge's sharp rise — a sign that consumers had expected that any inflation shock would be fleeting. What to watch: Consumers felt somewhat more upbeat about employment prospects and the outlook for their personal finances in May. On average, consumers said it was less likely that they would lose their job in the year ahead. Survey respondents saw slimmer odds that they would miss a debt payments over the next three months, a metric that has been rising sharply. Perceptions about their current financial situations compared to a year ago, and expectations for the year ahead, improved slightly, the New York Fed said.
Yahoo
9 hours ago
- Business
- Yahoo
NY Fed finds moderating inflation expectations in May
By Michael S. Derby (Reuters) -Americans' anxiety about the future path of inflation eased in May, as they also grew more upbeat about the state of their personal finances, a report released on Monday by the Federal Reserve Bank of New York said. The bank reported in its Survey of Consumer Expectations for May that the outlook for inflation across all the horizons it measures retreated. A year from now, survey respondents see inflation at 3.2% versus 3.6% in April, while three years from now it's seen at 3% versus 3.2%. Five years from now, inflation is projected at 2.6% from the prior month's 2.7%. The report found that survey respondents are expecting moderating price gains for gas, rent, medical care and college, while food costs a year from now are seen rising at a 5.5% rate, the highest mark since October 2023. Meanwhile, in May the year- ahead expected rise in house prices stood at 3%, down from April's 3.3%. The moderation in the outlook for inflation took place against a background of high uncertainty over the future of price pressures. Huge and ever-shifting tax hikes on imports imposed by the Trump administration are broadly expected by economists and policymakers to push up inflation, while depressing hiring and growth. The major question is whether the gain is a one-off or the makings of something more persistent. There's been little clarity on how much those tariffs will impact the economy, especially as President Donald Trump raises and lowers his import levies unpredictably. The survey period for the New York Fed report overlapped some of the biggest shifts on tariffs, and the moderation in May's readings will likely bolster officials' confidence that inflation is not fixing for an extended breakout to higher levels. The Fed is set to meet to deliberate on monetary policy on June 17-18 in a gathering that will almost certainly see the central bank leave its interest rate range steady at between 4.25% and 4.5%. Inflation remains above the 2% target and is not expected to moderate to desired levels any time soon, in an otherwise healthy economy. The New York Fed report also found that expectations of moderating future inflation gains came as households also upgraded their views on their incomes, earnings, hiring prospects and finances. The survey found 'slightly' improved views on households' views of their current financial situation in May, as respondents said access to credit improved relative to last year, while expectations of missing a debt payment declined.
CNBC
9 hours ago
- Business
- CNBC
Inflation fears receded in May as Trump eased some tariff threats, New York Fed survey shows
Americans grew less fearful about inflation in May as President Donald Trump backed off the most severe of his tariff proposals, according to a New York Federal Reserve survey Monday. The central bank's Survey of Consumer Expectations showed that the one-year inflation outlook took a substantial dip, down to 3.2% — a 0.4 percentage point decrease from April. At the three-year horizon, the outlook fell 0.2 percentage point to 3%, while the five-year forecast edged down to 2.6% from 2.7%. While all three are still above the Fed's 2% annual target, they represent progress and a change in a fearful attitude that coincided with Trump's saber-rattling on tariffs, culminating with the April 2 "liberation day" announcement. Trump initially slapped universal 10% tariffs on all U.S. imports and a menu of so-called reciprocal duties on dozens of nations. However, he soon backed off the latter measures, opting for a 90-day negotiating window that expires in July. The New York Fed survey, which is less volatile than others such as the University of Michigan and Conference Board measures, provides some good news for the White House at a time when administration officials are trying to tamp down worries about tariff-induced inflation. "By every measure of inflation, it's down by more than it's been in more than four years," National Economic Council Director Kevin Hassett said Monday morning on CNBC's "Squawk Box." "While the tariff revenue has been going up, inflation has been coming down, which is contrary to the story that everybody else has been saying, but very consistent with what we've been saying." Inflation as measured by the Fed's preferred personal consumption expenditures price index was at 2.1% in April, matching lowest its been since February 2021. Excluding food and energy, core PCE stood at 2.5%, a gauge Fed officials believes is a better measure of longer-term trends. The Fed survey showed expectations dipping across most price groups, though respondents did see food prices rising by 5.5% over the next year, a 0.4 percentage point increase from May and the most since October 2023. Elsewhere, respondents saw gas price increases easing to 2.7%, down 0.8 percentage point. The outlook for medical care, college education and rent increases also were lower on a monthly basis. There also was a positive move in employment, with those expecting to lose their job over the next 12 months dipping to 14.8%, down half a percentage point. Other areas showed optimism as well: The probability of missing a minimum debt payment over the next three months fell half a point to 13.4%, its lowest since January. Respondents also had more confidence in stocks, with 36.3% expecting the market to be higher a year from now, up 0.6 percentage point.
