Inflation Expectations Climb

The Federal Reserve Bank of New York revealed in its February 2025 Survey of Consumer Expectations that short-term inflation expectations have increased. The one-year-ahead horizon saw a rise of 0.1 percentage point to 3.1%, while the three- and five-year-ahead inflation expectations remained steady at 3%.

Household Spending Growth Expectations

Expectations for median household spending growth also saw an uptick, increasing by 0.6 percentage points in February to reach 5%. This indicates a growing anticipation among consumers for higher spending in the near future.

Financial Situation Outlook

The survey also highlighted concerns about future financial situations. While perceptions of current financial situations compared to a year ago remained mostly unchanged, there was a notable deterioration in year-ahead expectations. The proportion of households anticipating a worse financial situation in one year rose to 27.4%, marking the highest level since November 2023.