# U.S. consumers’ inflation expectations highest in 8 years, NY Fed says
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-09-13
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: U.S. Inflation Expectations Reach Highest Levels Since 2013
Meta Description: Discover how U.S. consumers' inflation expectations have reached new heights in the latest report by the New York Federal Reserve. Find out more now.
URL: https://financedigest.com/u-s-consumers-inflation-expectations-highest-in-8-years-ny-fed-sayshtml

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By Jonnelle Marte

(Reuters) – U.S. consumers’ expectations for how much inflation will change over the [next year and the coming](https://www.financedigest.com/whats-coming-next-in-the-clearing-and-settlement-world.html "What’s coming next in the clearing and settlement world?") three years rose last month to the highest levels since 2013, according to a survey released on Monday by the New York Federal Reserve.

Year-ahead [inflation expectations](https://www.financedigest.com/dollar-drops-as-inflation-cools-more-than-expected.html "Dollar drops as inflation cools more than expected") increased for the 10th straight month to a median of 5.2% in August, according to the monthly survey of consumer expectations. Inflation [expectations over the next three years](https://www.financedigest.com/philips-expects-to-reach-recall-settlements-this-year.html "Philips expects to reach recall settlements this year") increased to a median of 4.0%. Both metrics are at the highest they’ve ever been for the survey, which was launched in 2013.

U.S. central bank officials are keeping a close watch on inflation [expectations as they try to evaluate whether the pricing pressures triggered by the coronavirus pandemic will pass or have more lasting effects on the economy](https://www.financedigest.com/german-economy-expected-to-skirt-recession-economy-ministry-report.html "German economy expected to skirt recession – economy ministry report").

Some policymakers say [ending the massive asset purchases the Fed launched last year to support markets and the economy sooner rather than later will give officials more options for responding down the road](https://www.financedigest.com/exclusive-nissan-seeks-tech-tie-up-without-renault-as-alliance-nears-end-of-road.html "Exclusive-Nissan seeks tech tie-up without Renault as alliance nears end of road") if inflation lasts longer than anticipated.

Several policymakers said they expect the Fed to begin winding those asset purchases down later this [year despite a weakening in jobs](https://www.financedigest.com/inpost-sees-better-margin-in-poland-plans-no-job-cuts-this-year.html "InPost sees better margin in Poland, plans no job cuts this year") growth in August.

The New York Fed survey showed that consumers are raising their expectations for how much more they may have to spend on housing, food and other essentials over the [next year](https://www.financedigest.com/cepsa-to-nearly-double-investments-over-next-3-years-as-profit-soars.html "Cepsa to nearly double investments over next 3 years as profit soars").

Expectations for how much [home prices will increase over the next year](https://www.financedigest.com/germany-home-prices-to-sink-nearly-6-this-year-reuters-poll.html "Germany home prices to sink nearly 6% this year – Reuters Poll") dropped again in August for the third straight month, but were still elevated at a median of 5.9%, the survey found.

Food [prices are expected to grow by 7.9% over the next year](https://www.financedigest.com/hong-kong-home-prices-drop-15-6-in-2022-snap-13-years-of-gain.html "Hong Kong home prices drop 15.6% in 2022, snap 13 years of gain"), up from 7.1% in July. Rent is expected to increase by 10% over the next 12 months and the [price of medical care is expected to rise](https://www.financedigest.com/oil-prices-rise-on-u-s-drawdown-chinese-fears-weigh.html "Oil prices rise on U.S. drawdown, Chinese fears weigh") by 9.7% over the next year – both up 0.2 percentage point from July.

The report is based on a rotating panel of 1,300 households.

(Reporting by Jonnelle Marte; Editing by Paul Simao)


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