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In its August report on consumer expectations, the Federal Reserve-New York reported that respondents expect inflation to be 5.2 percent in a year, compared with 4.9 percent a month earlier.
They expect inflation to be 4% in three years, up from 3.7% in July. Both of these values are the highest in the history of the data since 2013.
The report also forecast significant price increases for the most important categories of goods and services of daily use for Americans.
Food prices are expected to show an increase of 7.9 percent in a year, rents are expected to rise 10 percent, and health care costs are expected to rise 9.7 percent.
The expected rise in price pressures is tempered by rather optimistic expectations about one's own finances. On average, household income growth is expected to reach a record 3% in a year.
Respondents also expect a slowdown in home price growth.
The Fed-New York report comes amid a rebound in the U.S. economy. The recovery from the bottom reached during the coronavirus pandemic has been rapid so far, but it has been accompanied by much higher than expected inflation, as Fed policymakers also acknowledged.
The rise in price pressures was largely due to supply chain disruptions related to the opening up of the economy. Fed policymakers have repeatedly signaled that the biggest spikes in inflation have been concentrated in the hardest-hit sectors of the pandemic economy.
The Fed's goal is to maintain price stability, and its policymakers mostly still believe that price pressures will diminish over time as imbalances are corrected.
source: cnbc.com
They expect inflation to be 4% in three years, up from 3.7% in July. Both of these values are the highest in the history of the data since 2013.
The report also forecast significant price increases for the most important categories of goods and services of daily use for Americans.
Food prices are expected to show an increase of 7.9 percent in a year, rents are expected to rise 10 percent, and health care costs are expected to rise 9.7 percent.
The expected rise in price pressures is tempered by rather optimistic expectations about one's own finances. On average, household income growth is expected to reach a record 3% in a year.
Respondents also expect a slowdown in home price growth.
The Fed-New York report comes amid a rebound in the U.S. economy. The recovery from the bottom reached during the coronavirus pandemic has been rapid so far, but it has been accompanied by much higher than expected inflation, as Fed policymakers also acknowledged.
The rise in price pressures was largely due to supply chain disruptions related to the opening up of the economy. Fed policymakers have repeatedly signaled that the biggest spikes in inflation have been concentrated in the hardest-hit sectors of the pandemic economy.
The Fed's goal is to maintain price stability, and its policymakers mostly still believe that price pressures will diminish over time as imbalances are corrected.
source: cnbc.com
