Source: Wall Street News
As the economic environment continues to change, so do consumers’ perceptions of future inflation. U.S. consumers expect the inflation shock to pass, a New York Fed survey found.
Consumers still mostly believe the current inflation shock is temporary and that price gains will remain low and stable in the long run, according to a report from the Federal Reserve Bank of New York on Thursday.
The survey of consumer expectations confirms earlier findings by the New York Fed that while short-term inflation expectations are rising, consumers expect prices to rise only about 3 percent on average over the next five years.
The researchers believe this suggests consumers expect the recent price spike to cool over time.
In addition, New York Fed President Williams also said in the report:
While short-term inflation expectations continue to trend upward, medium-term inflation expectations appear to have plateaued over the past few months , while longer-term inflation expectations remain fairly stable.
The survey found that in the short term, most consumers agree that inflation will remain high next year, mainly because the Fed’s preferred inflation indicator, the consumer price index, has continued to soar recently, rising 6.6% year-on-year in March and 8.3% in April. %.
However, some respondents were divided on medium-term inflation expectations. Among them, the proportion of respondents who expect high inflation and low inflation (even deflation) in three years time has increased.
It is also worth mentioning that compared with before the outbreak of the new crown epidemic, the survey found that respondents have become more uncertain about future inflation.
But for long-term inflation expectations, respondents are less uncertain, that is, consumers generally see long-term inflation as stable and low.
Editor/Corrine
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