Consumer inflation expectations rise in February
4 minutes ago
Consumers may be losing confidence that price pressures are easing, according to a new survey.
The New York Federal Reserve's February survey of consumer expectations shows that consumers expect inflation to reach 3.0% next year, the same as last month. However, their feelings about inflation worsened as they progressed. Consumers expect inflation to reach 2.7% in three years and rise to 2.9% in five years, both higher than January's results.
Consumers still expect their wages to remain above inflation and household income is estimated to rise 3.1%, unchanged from the last survey.
While consumers did not expect much relief from food and gas prices, the survey found that expectations for medical care price inflation next year fell to 6.8%, the lowest since September 2020. So did rent inflation expectations fell to more than 30% – a three-year low of 6.1%.
The consumer price index will provide insight into February's inflation trend tomorrow and comes after recent inflation readings showed prices remained higher than economists had expected.
-Terry Lane
Federal Reserve officials are in the “blackout period” this week.
32 minutes ago
Things appear to be a little quieter this week, with no member of the Federal Reserve's Federal Open Market Committee making speeches or statements on the state of the economy.
Federal Reserve officials are now in the so-called “blackout period,” during which they are banned from making public statements related to an upcoming meeting for nearly two weeks.
The blackout period, which officially began Saturday, will last until March 21, a day after the conclusion of the Federal Reserve's Federal Open Market Committee meeting at which the Fed will announce its latest interest rate decision.
Blackout periods begin two Saturdays before a Fed meeting and last until the Thursday after. The only exception to the blackout period is when Fed Chairman Jerome Powell addresses the media after the committee's two-day meeting to deliver prepared remarks on the decision.
According to the Fed, these lock-in periods are intended to ensure that the committee can remain on the same page with its communications, which members carefully prepare at each meeting.
That means investors won't have time to digest comments from Fed officials this week when the Consumer Price Index on February inflation is released tomorrow or consumer spending information is released later in the week. These are two important parts of the economic situation that could influence the Fed's recent “data-driven” approach.
Federal Reserve officials had a lot to say in the days leading up to the blackout, reiterating the need for patience with interest rate cuts in several remarks. Officials said they needed to see more evidence that inflation was on a sustained downward trend before voting for lower interest rates.
-Terry Lane
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