Inflation expectations among American consumers spiked in January, according to a University of Michigan survey, challenging the Federal Reserve's decision to lower interest rates three times in late 2024. While consumers feel slightly better about their personal finances, concerns about rising prices in the future have heightened significantly.
Inflation expectations among American consumers surged in January, according to the latest University of Michigan survey, casting doubt on the Federal Reserve ’s decision to cut interest rates three times late last year. The findings suggest that while consumers feel marginally better about their personal finances, concerns about rising prices in the months ahead have intensified.
Inflation expectations for the year ahead jumped to 3.3 percent from 2.8 percent in December, reaching the highest level since May 2024. Long-term expectations, meanwhile, rose to 3.3 percent from 3.0 percent, a significant increase that has occurred only a handful of times in recent years. Hsu noted that the rise in inflation concerns was broad-based, affecting multiple demographic groups, with notable increases among lower-income consumers and political Independents.
INFLATION ECONOMY FEDERAL RESERVE INTEREST RATES CONSUMER EXPECTATIONS
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