The Washington Post

Consumers expect continued inflation

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U.S. consumers’ expectatio­ns for how much inflation will change over the next year and the coming 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 increased for the 10th straight month to a median of 5.2 percent in August, according to the monthly survey of consumer expectatio­ns. Inflation expectatio­ns over the next three years increased to a median of 4.0 percent. 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.

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 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 job 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.

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

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