US Inflation Expectations Hit 3-Year Low, NY Fed Survey Reveals

The New York Federal Reserve's Survey of Consumer Expectations shows that Americans' median expectation for inflation has dropped to 3%, the lowest level in three years, indicating increased optimism. However, expectations for longer-term inflation remain above the Fed's 2% target, suggesting persistent inflation. The survey also reveals expectations for the cost of food and rent to decrease, while the cost of college education is anticipated to rise. Fed policymakers are closely monitoring consumer expectations as they play a critical role in shaping actual inflation. Chairman Jerome Powell has reiterated the Fed's commitment to reining in inflation, with officials considering a pivot to rate cuts in 2024 as signs of a cooling economy emerge.