© Reuters. FILE PHOTO: The U.S. Federal Reserve building is pictured in Washington, March 18, 2008. REUTERS/Jason Reed/File Photo
Por Michael S. Derby
NEW YORK, Feb 13 (Reuters) – Americans continued to expect elevated near-term and more modest long-term inflation pressures in January, while cutting expectations for future income gains, the New York Federal Reserve said on Monday.
Those consulted in the latest Survey of Consumer Expectations of the regional bank said they expect inflation a year from now to remain stable at 5%.
The level of inflation forecast for three years from now was 2.7%, below the expectation of 2.9% in December, while the inflation forecast for five years from now was 2.5%, compared to to 2.4% of the previous month.
Federal Reserve officials pay close attention to this data because they believe that the direction the public expects inflation to take greatly influences their current situation.
The expected future trajectory of inflation remains well above the central bank’s 2% target, as policymakers push aggressively with interest rate hikes aimed at combating high inflationary pressures.
The New York Fed said the expected rise in home prices slowed last month to its second lowest reading since May 2020. Respondents projected higher food and energy costs, while they saw stable future rises for rent and medical costs.
The survey also found that those surveyed in January saw future growth in household income at 3.3%, below the previously expected 4.6% monthly increase.
The New York Fed pointed out that this is the biggest drop in a month for this indicator. For their part, expectations for growth in spending moderated to 5.7% last month, compared with the 5.9% expected in December.
(Reporting by Michael S. Derby; Editing in Spanish by Javier Leira)
