NY Fed's September survey just dropped: people now expect 3.9% inflation over the next year, up from 3.58%. Three-year outlook also ticked higher to 3.25%.
What people *expect* inflation to be matters more than most realize. Expectations shape behavior—wage demands, pricing decisions, spending patterns. When those numbers drift higher, it becomes a self-fulfilling mechanism.
We're not in panic territory, but the direction isn't comforting. The Fed's been trying to anchor these expectations lower for months. This isn't helping their case.
What people *expect* inflation to be matters more than most realize. Expectations shape behavior—wage demands, pricing decisions, spending patterns. When those numbers drift higher, it becomes a self-fulfilling mechanism.
We're not in panic territory, but the direction isn't comforting. The Fed's been trying to anchor these expectations lower for months. This isn't helping their case.