Americans' short-term inflation expectations fall in May: New York Fed

By Ovunc Kutlu

ISTANBUL (AA) - American consumers' short-term inflation expectations declined in May, according to a survey released Monday by the Federal Reserve Bank of New York.

The median one-year-ahead inflation expectation decreased by 0.3 percentage points to 4.1% in May, the survey showed.

This is the lowest reading since May 2021, it noted.

The figure stood at 4.4% in April, and at 4.7% in March when consumers' inflation expectations had increased for the first time since October last year.

While the one-year-ahead expected price changes for college education plummeted by 0.7 percentage points to 7.1%, they declined by 0.4 percentage points to 5.4% for food, according to the survey.

However, both the three-year and five-year-ahead inflation expectations rose by 0.1 percentage point to 3.0% and 2.7%, respectively.

"After staying unchanged at 3.0% for five consecutive months, median one-year-ahead expected earnings growth declined to 2.8%," the report said.

Consumer inflation in the US rose 9.1% annually in June, the largest 12-month increase since November 1981. With the US Federal Reserve's aggressive monetary tightening and rapid interest rate increases, consumer inflation eased to 4.9% in April.

The consumer inflation figure for May will be released Tuesday at 8.30 am EDT, while the Fed will announce its interest rate decision Wednesday at 2.00 pm EDT.