A survey released last Monday by the New York Federal Reserve found that Americans expect weaker inflation in the years ahead and an improvement in their personal financial situations, Reuters reported.
In the survey conducted last month, the New York Federal Reserve found that respondents expected inflation a year from now to be 3.5 percent, down from 3.8 percent expected in the June survey. The expectations for 3 and 5 years from now fell from 3 percent in June to 2.8 percent in July.
According to the New York Federal Reserve, in July, Americans predicted lower rates of inflation on food, gas, rent, healthcare, and college costs. Meanwhile, the predicted rise in home prices a year from now dropped from 2.9 percent in June to 2.8 percent in July.
The survey comes as key measures of inflation have been cooling, raising the question of whether the Federal Reserve will need to increase interest rates again.
At a policy meeting last month, the central bank raised its benchmark overnight target rate by 0.25 percent to the 5.25 to 5.5 percent range.
The current moderation in expected inflation in the next year will likely be seen as a positive outlook on price pressures since policymakers believe that the predicted path of inflation strongly influences where inflation stands today.
Respondents in the survey also had more positive expectations about their personal finances and the job market.
According to the survey, more respondents rated their personal finances positively while fewer rating their personal financial situation negatively than they did a year ago. The percentage of Americans who expected their financial situation to improve a year from now rose to the highest point since September 2021.
The New York Federal Reserve also found that respondents expect the job market outlook to improve a year from now.
