The public expects prices to surge higher in the coming year but believes inflation will remain under control in the longer term, data from the Federal Reserve Bank of New York indicated Monday.
The public expects inflation to lift prices 4.8 percent higher a year from now, up from a forecast of 4 percent in May, the New York Fed said in its latest Survey of Consumer Expectations. That is the highest reading recorded in data going back to 2013.
The bank said expected inflation three years from now held steady at 3.6 percent.
The increase in the one-year forecast was driven mostly by people with have some college education, the bank said.
The median year-ahead home price change expectations remained unchanged at 6.2 percent, substantially higher than its 12-months trailing average of 3.7 percent.
The median expected changes in the price of food decreased to 7.1 percent from 8 percent in May. The expectations for gasoline prices fell to 9.2 percent from 9.8% in May. The median expected change in the cost of medical care was unchanged at 9.4 percent and rent expectations remained unchanged at 9.7 percent.
The public is also less certain and more divided over the prospects for inflation. Median inflation uncertainty increased at the short-term horizon and remained unchanged at the medium-term horizon. Both measures are elevated relative to pre-COVID-19 as well as their 2020 readings, the New York Fed said. The measure of disagreement among those polled reached new series’ highs in both the year ahead and 3 year ahead timeframes.