New York Feds inflation expectations rises to 3.4% from 3.2% in March

Inflation expectations rises to its highest level since September 2013

New York Fed survey for April is showing:

• inflation expectations rises to 3.4% from 3.2% in March. This is the highest level since September 2013
• three year inflation expectations unchanged at 3.1%
• medium year ahead expectations for home prices and rent price growth increase to new series highs ( going back to 2013)
• One year head expected change in gas prices dropped to 9.2% in April from a series high of 9.9% March
• household income growth fell to 2.4% in April from 2.8% March
• medium household spending growth expectations fell slightly to 4.6%. The decline was driven by a decline among households with incomes above $100,000

The Fed has been looking at inflation as transitory, but will keep its eye on the data. A survey is not necessarily actual data. The Fed is well aware that base affects will increase inflation in the near term. Also supply disruptions from the restart will also increase prices. However, their feeling is that those increases will start to moderate by the end of the year and inflation levels will be more around the 2% level next year.