US consumers’ short-term inflation expectations hit record high in May

By Aysu Bicer

ANKARA (AA) - The US consumers’ expectations for inflation over the coming year rose to 6.6% in May, according to a survey by the Federal Reserve Bank of New York.

The figure is tying the highest reading of the series since the inception of the survey in June 2013.

Short-term inflation expectations in the country dropped to 6.3% in April after reaching a record high of 6.6% in March.

Household spending expectations over the next year also rose by 1.0 percentage point to reach 9%.

The medium-term inflation expectations covering the next 3-year period remained unchanged at 3.9%.

The median one-year-ahead home price expectations came in at 5.8% -- down from 6% in April but still elevated relative to pre-pandemic levels.

After declining sharply last month, the year-ahead expected change in the price of gas rose slightly to 5.5% in May, whereas the expected change in the price of food, medical care and rent all fell by 0.1 percentage point to 9.3%, 9.4% and 10.2%, respectively.

Annual inflation in the US hit 8.6% in May, the highest since December 1981, which strengthened the views the Fed could increase interest rates further.