U.S. consumers' medium-term inflation expectations fall to lowest level in 11 years

According to Jinshi, a survey by the Federal Reserve Bank of New York showed that U.S. consumers' expectations for medium-term inflation have fallen to the lowest level since at least 2013. In January, the expected inflation rate for the next three years fell to 2.35%, the lowest level in nearly 11 years of data records. The median expectations for inflation in the next year and five years were 3% and 2.5%, respectively, unchanged from last month. These data will help reassure Federal Reserve officials who have previously said they are seeking greater confidence that inflation will remain near the 2% target before starting to cut interest rates. Americans' inflation expectations for frequently purchased goods (food and gasoline) both fell in the January survey. The expected change in gasoline prices in the next year fell to 4.2%, the lowest level since December 2022; the expected change in food prices fell to 4.9%, the lowest level since March 2020.