NY Fed Survey of Consumer Expectations: Inflation expectations ticked down - Nomura

According to the NY Fed Survey of Consumer Expectations, inflation expectations ticked down at both the one- and three-year horizons in May, notes the analysis team at Nomura.

Key Quotes

“The median one-year ahead expected inflation rate decreased by 0.2pp from 2.8% to 2.6%; for the three-year horizon, the median expected inflation rate decreased by 0.4pp from 2.9% to 2.5%. Looking at the details, respondents under the age of 40 and those with less than a college education drove much of the decline. Older, more educated workers tend to have more accurate and less uncertain inflation expectations, and these groups have remained somewhat steady over the past six months. It’s important to note that the FOMC tends to look through month-to-month volatility in this series and while May’s numbers are somewhat low, they’re still above the readings from January 2016.”

“In other areas of the survey, home price change expectations at the one-year horizon saw the third consecutive month of increases. The one-year ahead median expected home price change in May, at 3.48%, is well-above the 3.05% from February 2017. Regarding household finance, household spending growth projections for one-year ahead remained unchanged at 2.6%.”