Expectations on inflation decline further: New York Fed

13 Sep '22

1 min read

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The August 2022 survey of consumer expectations (SCE) released recently by the Federal Reserve Bank of New York's Center for Microeconomic Data shows that inflation expectations continued to decline across all horizons. Median one- and three-year-ahead inflation expectations continued their steep declines in the month, the New York Fed said.

The one-year measure fell to 5.7 per cent from 6.2 per cent in July, while the three-year measure fell to 2.8 per cent from 3.2 per cent.

Expectations about year-ahead price increases for gas also continued to decline, with households now expecting gas prices to be roughly unchanged a year from now.

Median five-year-ahead inflation expectations, which have been elicited in the monthly SCE core survey on an ad-hoc basis since the beginning of this year and were first published in July this year, also declined to 2 per cent from 2.3 per cent. Disagreement across respondents in their five-year-ahead inflation expectations also declined in August.

Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—decreased at the short-term horizon and was unchanged at the medium-term horizon.

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