Americans Brace for Higher Inflation in Coming Years, Fed Survey Says
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Although the Federal Reserve is doing its part to control inflation and bring it to 2%, many Americans assure that in the coming years the prices of some services will remain high.
In a survey published this Monday by the New York Federal Reserve, he stated that more Americans are preparing for higher inflation in the coming years, despite the fact that interest rates were increased for the tenth time last week and a new fall in prices is anticipated. consumer prices.
According to the New York Fed-driven Consumer Expectations Survey, it expects the inflation rate to rise to 4.4% within a year, a few digits below the 4.7% in March.
The recent rise in interest rates of 0.25 percentage points puts rates in the range of 5% to 5.25%, a strategy implemented since last year by policymakers to control inflation and bring it to 2%.
Although some analysts consider that with this tenth increase there will be a pause, the president of the Federal Reserve, Jerome Powell, hinted that everything will depend on how the economy reacts in the coming weeks.
Powell further stated that “Ultimately, we are not looking to get to 3% and then abandon our tools. We have the goal of reaching 2%. We think it will take some time. We don't think it's a smooth process. I reckon we'll have to stay like this for a while,” he said.
However, consumers have other perspectives according to the survey. Most believe that inflation will be 2.9% within the next three years and 2.6% in the following five years. In addition, they expect that by 2024, the prices of some services such as gasoline or the cost of housing will increase.
The report anticipates that unemployment in the United States will also rise, respondents remain pessimistic about improvements in the labor market. Taking into account that many consider that the chances of losing their jobs are increasingly high.