Concerns about inflation triggered by Trump's tariffs have eased, and a Federal Reserve survey shows that public expectations are stable
According to a survey by the Federal Reserve Bank of New York, consumers' expectations for inflation over the next year remain at 3%, consistent with levels prior to Trump's presidency, indicating that concerns about inflation triggered by Trump's tariff policies have largely dissipated. Despite the overall stabilization of inflation expectations, consumers still have high expectations for rising living costs such as gasoline, medical expenses, college tuition, and rent. In terms of employment, the likelihood of rising unemployment has decreased, with the proportion of those worried about unemployment falling to 14%
According to a recent survey released by the Federal Reserve Bank of New York on Tuesday, earlier market concerns about President Trump's tariff policies potentially triggering severe inflation have largely dissipated.
The bank's monthly "Consumer Expectations Survey" shows that U.S. consumers' expectations for inflation over the next year remain at 3%, consistent with the level in January before Trump took office. This figure has decreased by 0.2 percentage points from May and has significantly retreated from the peaks of 3.6% in March and April.
Earlier this year, Trump vigorously promoted tariff policies after taking office, announcing a comprehensive 10% tariff on multiple trading partners and proposing a series of "reciprocal taxation" plans, which raised market concerns about rapidly rising prices. However, since April, Trump has gradually shifted to a more moderate negotiating stance, and the topic of tariffs has become less prominent.
Currently, these tariff policies have not yet manifested in most official inflation data. According to the U.S. Bureau of Labor Statistics, the Consumer Price Index (CPI) rose only 0.1% in May, while the annualized inflation rate stood at 2.4%, which, although above the Federal Reserve's 2% target, remains moderate and controllable.
The survey also indicates that consumers' expectations for medium- to long-term inflation remain stable: the inflation expectation for the next three years is 3%, while the five-year expectation is 2.6%.
Despite the overall stabilization of inflation expectations, the survey also points out that consumers still hold relatively high expectations for price increases in certain key living costs. For example, respondents expect gasoline prices to rise by 4.2% over the next year, with medical costs expected to increase by as much as 9.3%, the highest level since June 2023; college tuition and rent are also expected to rise by 9.1%, while food prices are expected to increase by 5.5%, unchanged from the previous month.
On the employment front, the data shows some positive signs. The likelihood of an increase in the unemployment rate over the next year has decreased by 1.1 percentage points; meanwhile, the proportion of respondents worried about unemployment has dropped to 14%, the lowest level since December of last year
