Traders work on the floor of the New York Stock Exchange on Tuesday. [AFP]
Traders work on the floor of the New York Stock Exchange on Tuesday. [AFP]

US consumers' one-year inflation expectations rose again in June, reaching their highest level since September 2023. With medium-term expectations also climbing, the readings could complicate the Federal Reserve's path toward interest rate cuts.

The New York Fed's June Survey of Consumer Expectations, released Tuesday, put one-year inflation expectations at 3.7% — up 0.2 percentage points from the previous month and the highest reading since September 2023.

Three-year inflation expectations also rose 0.2 percentage points to 3.3%, the highest level in about four years since June 2022.

Five-year inflation expectations, however, held steady at 3.0%, unchanged from the prior month.

Inflation expectations measure how much consumers anticipate prices will rise. The Fed closely monitors the indicator because higher consumer price expectations can drive wage demands and shift spending behavior, potentially feeding through to actual inflation.

The survey showed short- and medium-term inflation expectations rising in tandem while the long-term gauge remained stable, suggesting consumers believe price pressures will persist for now.


sjy@heraldcorp.com