By Michael S. Derby
(Reuters) -U.S. consumers were bracing last month for higher levels of inflation in coming years even as they marked up expectations that their personal financial situations would improve markedly, the New York Federal Reserve reported on Monday.
Respondents to the regional Fed bank’s survey of consumer expectations in November see inflation a year from now at 3%, versus the 2.9% expected in October, while inflation in three years is seen at 2.6%, compared to 2.5% in the previous month. Inflation five years from now is expected to be 2.9%, compared to 2.8% in October.
The New York Fed noted educational levels affected the view on future inflation, saying “the overall increase in one- and three-year-ahead inflation expectations masks a decline among those without a college degree and an increase among those with a college degree.”
The projected rise in inflation contrasted with expectations that gasoline prices, rent and food costs will all rise at a weaker rate a year from now, even as the costs of medical care and college are seen mounting bigger gains. Meanwhile, the expected rise in home prices held steady at 3% in November.
The survey was released at a time of considerable expected change in the path of the economy tied to President-elect Donald Trump’s imminent return to the White House. Trump is widely expected to pursue policies that increase price pressures through his promise of large tariffs on U.S. trading partners and deportations of…
