Stable Short-Term Inflation Expectations

According to the January 2025 Survey of Consumer Expectations released by the Federal Reserve Bank of New York, inflation expectations for the one- and three-year-ahead horizons have remained steady at 3%.

Rise in Five-Year-Ahead Inflation Expectations

However, there's been a notable increase in the five-year-ahead inflation expectations, which surged by 0.3 percentage points to reach 3%.

Decline in Household Spending Growth Expectations

The survey also highlighted a decline in the median household spending growth expectations, dropping by 0.4 percentage points in January to 4.4%, marking the lowest since January 2021.

Deterioration in Household Financial Situations

Moreover, perceptions regarding households' current financial situations compared to a year ago have worsened in January. The net share of households reporting a worse versus better situation has risen. Similarly, year-ahead expectations about households' financial situations have also deteriorated.