US consumers’ inflation outlook steady in August, Fed report shows

The New York Federal Reserve reported on Tuesday that US consumer expectations for inflation remained steady in August, despite growing concerns about employment and personal finances. Survey participants maintained their prediction of 3.6% inflation in one year and 3% in five years, though expectations for inflation three years from now decreased slightly to 3.2% from 3.3% in July.

Gasoline prices were anticipated to rise in the next year, according to the report. The perceived probability of losing a job increased in August, reaching its highest level since April 2020 when the COVID-19 pandemic impacted the economy, and the likelihood of securing new employment after losing a job also declined. Consumers expressed pessimism about their current and future financial situations, as well as their views on credit access.

The Consumer Price Index for August is set to be released on Friday, which may influence the Federal Reserve's decision at their meeting on September 15-16. The Fed's benchmark interest rate currently sits between 3.50% and 3.75%, with inflation still above the central bank's 2% target.