New York Fed survey shows slower U.S. inflation expectations in May
The New York Fed’s May Survey of Consumer Expectations shows slippage in inflation expectations from what were elevated near term views in April, while the 5-year view is the lowest since January 2024. This hints that consumers have not seen sharp price hikes in May, reducing upside risks to the CPI.
The 1-year view fell to 3.2% from 3.63% in April. May’s view is a 3-month low after April hit the highest level since September 2023. The 3-year view retuned to 3.0%, where it had been in February and March, after rising to 3.17% in April. The 5-year view of 2.61% is down from 2.74% in April, and a third straight drop from 2.98% in both January and February.
Michigan CSI price expectations accelerated in early May though that was surveyed largely before the reduction in tariffs agreed by the U.S. and China. Final Michigan CSI data was less strong than in the preliminary. Michigan CSI inflation expectations are still much more elevated than the New York Fed’s survey, at 6.6% for a 1-year view and 4.2% for 5-10 years. The New York Fed survey is probably more accurate, with the Michigan CSI details reflecting political biases.