Consumers in August saw inflation at 5.75% over the next 12 months, down from 6.2% in July and the lowest rate since October 2021, the New York Fed's monthly consumer expectations survey showed on Monday. They also foresaw price increases averaging 2.8% over the next three years - the lowest pace since late 2020 - after pegging inflation over that horizon at 3.2% in July.
The Federal Open Market Committee - the Fed's policy-setting arm - is expected at its Sept. 20-21 meeting to raise the central bank's benchmark overnight lending rate again from the current range of 2.25%-2.50%. A week before the Fed's June 14-15 policy meeting, elevated readings of consumer inflation expectations in the New York Fed's survey results contributed to a last-minute decision to ramp up the size of the rate hike. Up to that point, most forecasters had expected only a 50-basis-point increase.
Consumers responding to the New York Fed questionnaire in August saw a lower likelihood that they would lose their job in the next year than in July and a higher probability of finding a new job should they lose their current employment.