NEW YORK, 13 FEB. According to the New York Federal Reserve, Americans in January reduced their forecasts for future income growth but continued to predict severe near-term inflation pressures and more moderate ones over the longer run.
One year from now, respondents to the most recent Survey of Consumer Expectations conducted by the regional Fed bank predicted that inflation will remain constant at 5%. Inflation in three years was predicted to be 2.7%, down from the forecast of 2.9% in December, while in five years, it was predicted to be 2.5%, up from 2.4% in the previous month.
Inflation is still expected to increase at a rate that is far higher than the U.S. central bank’s 2% objective as policymakers continue to aggressively raise interest rates to confront the excessive inflation pressures.
Economists anticipate the government will announce on Tuesday that the Consumer Price Index increased 6.2% from the corresponding month in 2022, a small easing from the 6.5% increase in December.
According to the study, respondents in January anticipated a 3.3% increase in household wages, down from the 4.6% increase they anticipated in December. Future expenditure growth was anticipated to increase by 5.9% in December, but only by 5.7% last month.