Inflation Expectations Declined Across All Horizons, NY Fed Says

Consumers’ expectations for future price pressures improved across all horizons in May, and households’ pessimism about the labor market somewhat eased, according to monthly survey data released Monday by the Federal Reserve Bank of New York.

Median expectations for inflation one, three and five years ahead all decreased in May. The decline was most significant in projections for year-ahead price growth, which dropped to 3.2% from 3.6% in April. Expectations for inflation three years ahead fell to 3% from 3.2%, and forecasts for five years ahead edged down to 2.6%.