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US Consumer Inflation Expectations Running High



Expectations for inflation in the US over the next yr is at a record 4.8%”— Paul Ebeling

US consumers’ expectations for inflation over the medium term rose to an 8yr high in July, according to a Federal Reserve Bank of New York survey.

The median survey respondent anticipated an inflation rate of 3.7% in 3 yrs’ time, the highest since August 2013 and up from 3.6% in June, the New York Fed said Monday. .

Fed officials follow measures of inflation expectations closely because they believe them to be Key determinants of actual inflation.

The New York Fed survey results are somewhat at odds with indicators of inflation compensation in financial markets, like the 10-yr breakeven inflation rate derived from inflation-protected Treasury bonds, which has moderated since reaching an eight-year high in May.

Consumers polled by the New York Fed said they expected rents to increase 9.8% in the coming year, the highest reading since the survey began in 2013. Expected changes in medical care costs over the next 12 months ticked up to 9.5%, while the expected change in gas prices moderated to 8.1%.

Older Americans and those with incomes below $50,000 reported the sharpest anticipated rise in prices over the medium term, the survey results showed.

Forecasters we polled expect the Labor Department’s monthly report on consumer prices Wednesday, will show that the annual inflation rate moderated a bit in July after rising to a 13-yr high of 5.4% in June.

Have a prosperous day, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.