By Michael S. Derby<\/p>\n
April 7 (Reuters) – Americans, rattled by surging energy prices tied to war in the Middle East, are expecting higher near-term inflation and fresh challenges to their personal financial situations, the Federal \u200cReserve Bank of New York reported on Tuesday.<\/p>\n
The bank said as part of the March findings of its \u200clatest Survey of Consumer Expectations that inflation a year from now is seen at 3.4%, up from 3% last month. The jump left that \u200bfrequently volatile reading where it was in December.<\/p>\n
The big increase in near-term inflation expectations came as the projected rise in gasoline prices, up 5.3 percentage points to 9.4%, was the highest since March 2022. That comparison was notable as it came from a similar energy shock tied to the Russian invasion of Ukraine, which, like the Middle East war started by President Donald Trump \u200cand Israel, upended global energy markets.<\/p>\n
The jump \u2060in near-term inflation expectations is not surprising given that they are highly reactive to events. The Fed survey found that longer-range inflation projections were more muted: Inflation projections for three years from \u2060now stood at 3.1% in March from 3% the prior month, while the inflation outlook for five years from now was stable at 3%.<\/p>\n
All the expected levels of inflation stand well above the Fed\u2019s 2% target. The Fed has been struggling to get inflation \u200bback \u200bto that target and the war, coupled with the ongoing overhang \u200bof Trump\u2019s import tax increases, has thwarted what \u200chad been a trajectory of price pressure returning to the Fed\u2019s goals.<\/p>\n
In an interview on Bloomberg\u2019s television channel early on Tuesday, New York Fed President John Williams said the war- related energy shocks \u201cwill directly go into headline inflation because energy prices are an important component of that\u2026I expect headline inflation to actually be elevated, you know, in the middle of this year\u201d and come in at around 2.75% for the year, he added.<\/p>\n
That said, Williams reiterated that he views monetary policy \u200cas \u201cwell positioned\u201d and in a good place while policymakers see how the \u200beconomy performs. The Fed\u2019s interest rate target rate range currently stands between \u200b3.5% and 3.75%, with officials having penciled in \u200ba single rate cut this year at last month\u2019s policy meeting.<\/p>\n
The stability of longer-run inflation expectations \u200cis likely to cheer Fed officials, as they show \u200bthe public is retaining confidence \u200bthat the war is not engineering a broader impact on inflation. Fed officials largely agree that where inflation is seen heading has a strong influence on where it is today.<\/p>\n","protected":false},"excerpt":{"rendered":"By Michael S. Derby April 7 (Reuters) – Americans, rattled by surging energy prices tied to war in…\n","protected":false},"author":3,"featured_media":711284,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5122],"tags":[5229,50756,27223,1257,26049,37510,296185,405,403,130350,5226,5225,5228,5227,5005,67,586,132,5230,68,2969],"class_list":["post-711283","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-york","tag-america","tag-energy-prices","tag-expectations","tag-fed","tag-headline-inflation","tag-inflation-expectations","tag-inflation-projections","tag-new-york","tag-new-york-city","tag-new-york-fed","tag-newyork","tag-newyorkcity","tag-ny","tag-nyc","tag-president-donald-trump","tag-united-states","tag-united-states-of-america","tag-unitedstates","tag-unitedstatesofamerica","tag-us","tag-usa"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116364159700906276","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/711283","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=711283"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/711283\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/711284"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=711283"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=711283"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=711283"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}