MNI BRIEF: 1Y Inflation Views Highest In 18Mos - NY Fed Survey

The New York Fed's survey-based measure of year-ahead consumer inflation expectations jumped 0.45 pp to 3.58% in March, the highest since September 2023, while the three-year-ahead measure was unmoved at 3.00% and the five-year-ahead declined a tenth to 2.86%. 

The survey’s measure of disagreement across respondents, the difference between the 75th and 25th percentiles of inflation expectations, increased at the one- and three-year-ahead horizons and was unchanged at the five-year-ahead horizon. Median home price growth expectations decreased by 0.3 percentage point to 3.0% in March. 

Fed officials are paying close attention to inflation expectations and are keen to see that longer run expectations remain anchored. The New York Fed survey has shown more muted moves in consumer expectations compared to the results of the University of Michigan survey. The current Fed survey was fielded before President Trump's sweeping tariffs announcements starting April 2 with roughly equal amounts of responses collected every week in March. (See: MNI INTERVIEW: Inflation Expectations Surge, Troubling For Fed)

Unemployment, household income, job loss, and earnings growth expectations also deteriorated last month, according to the survey. Households were also more pessimistic about their year-ahead financial situations and credit access. Stock price expectations declined and reached the lowest level since June 2022.