U.S. consumers’ inflation expectations for the next one, three and five years have all plummeted, according to the New York Fed.latest researchbecame clear. It could allay fears from the Fed that record inflation is affecting household behavior.
Three-year inflation expectations fell to 3.2% in July, the survey showed. It was 3.6% in June. This is the second straight month of decline. Inflation expectations one year ahead fell to 6.2% from 6.8% the previous month.
Inflation Expectations
Survey shows substantial declines in short-, medium- and longer-term
Source: Survey of Consumer Expectations, Federal Reserve Bank of New York
Falling petrol prices in recent weeks have done much to ease household worries. A survey by the New York Fed showed that the forecast for gasoline price growth over the next year has slowed to 1.5%. This is an 8-point drop from the March survey.
The outlook for food price increases over the next year also fell sharply from the previous month. Rents are expected to rise less than 10% for the first time since January.
Original title:US Inflation Expectations Drop Sharply Across All Time Horizons(excerpt)