Official inflation expectations have hit their highest levels since recording began in 2013.
According to data released Monday by the Federal Reserve Bank of New York, the June 2021 “Survey of Consumer Expectations” reveals that median one-year inflation expectations climbed to 4.8% — a 0.8% increase since last month.
In January, February, March, April, and May, one-year expectations were respectively 3.0%, 3.1%, 3.2%, 3.4%, and 4.0% — implying that anticipated inflation has progressively increased since the beginning of the year. Meanwhile, three-year inflation expectations — currently at 3.5% — have remained essentially unchanged since last month, though they have also increased from January levels.
While the outlook for the next three years remained unchanged at 3.6%, that is still well above the 2% level that the Fed considers healthy for a growing economy.
Central bank officials have been insistent that the recent inflation spike won’t last. They projected at their June meeting that their preferred gauge would show a 3% gain in