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Americans' inflation expectations declined sharply in July, New York Fed says
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Consumer expectations for where inflation will be one year from now fell sharply in July, according to a key Federal Reserve Bank of New York survey published Monday, a potentially reassuring sign for the U.S. central bank as it tries to cool surging prices.
The median expectation is that the inflation rate will be up 6.2% one year from now, a major decline from the 11-year high of 6.8% recorded in June, according to the New York Federal Reserve's Survey of Consumer Expectations. Three years from now, consumers see inflation cooling off slightly to 3.2% – down from the 3.6% recorded last month.
Consumers anticipate that prices will drop even further over the next five years, projecting that the inflation rate will hover around 2.3% in 2027.
"Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined slightly at both the one- and three-year-ahead horizons," the report said. "Uncertainty at the five-year-ahead horizon decreased more substantially."
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