© Reuters
by Roberto Zach
Investing.com – New York Fed inflation expectations rose in October. According to the findings, short- and medium-term expectations increased across all age, education and income groups.
The median one-year inflation expectation increased by 0.5 percentage points to 5.9% in October, while the three-year median inflation expectation increased by 0.2 percentage points to 3.1%.
The five-year average inflation expectations, which have been captured ad hoc in the SCE monthly core survey since the beginning of this year and were first published in July 2022, rose by 0.2 percentage point to 2.4 %. Survey participants’ disagreement about their five-year inflation expectations increased in October, the New York Fed said.
The median expected path in house prices for next year was 2.0%, the lowest level since July 2020 and thus further below the pre-crisis level.
Those in the US had increased by 7.7 percent in October, the lowest rate since the beginning of the year. Inflation peaked at 9.1% in June. The main drivers of runaway inflation have been the cash gifts handed out to Americans during the pandemic. The war in Ukraine and its aftermath exacerbated existing problems: supply chains were strained, costs were rising, oil and gas were becoming more expensive.
In the fight against runaway inflation, the US Federal Reserve sharply raised its key interest rate this year. After the recent sharp interest rate hikes, however, there are growing voices calling for a slower pace of hikes.
On the market side, a 50 basis point rate hike is expected for the December meeting.
