Sept 9 (Askume) – The U.S. public’s view on inflation pressures changed little last month as existing price pressures continued to decline, according to a report released by the New York Federal Reserve on Monday.
In its latest survey of consumer expectations, the regional Federal Reserve found that respondents in August expected inflation to be 3% in one year and 2.8% in five years, unchanged from July. Three years from now, respondents expect inflation to rise to 2.5%, up from July’s 2.3%.
The report also found that the expected change in home prices in August rose to 3.1% from 3% the previous month.
With price pressures continuing to ease and job market risks rising, the Federal Reserve is almost certain to lower its benchmark overnight interest rate from the current range of 5.25%-5.50% next week. Markets are divided on whether the Federal Reserve will cut its policy rate by a quarter or half a percentage point after the release of weak employment data for August on Friday , although most traders and investors believe a series of rate cuts will continue.
While overall inflation expectations are broadly stable in August, the New York Fed report found that people expect higher increases in gas, rent and health care prices, while growth in food and college prices has slowed.
The report said respondents believed labor market prospects were mixed and expected income and benefits to increase. Spending expectations have also risen.
The survey also found that expectations of credit access had improved, with the August reading reaching the highest since April 2020, though respondents said expectations of being unable to repay debt rose for the third consecutive month.
