Fed survey shows improved consumer confidence in inflation and job market
Inflation expectations for year ahead at 2.9, lowest in four years
Consumers see lower risk of debt default, improved credit access
Nov 12 Reuters U.S. consumers in October grew more confident about inflation continuing to ease and in the health of the job market, and for the first time in five months they saw a lower risk of defaulting on their debt, a survey from the Federal Reserve Bank of New York showed on Tuesday.
Households on average saw inflation over the next year at 2.9, down from 3.0 in September and the lowest estimate for nearterm price increases in four years, according to the New York Fed39;s monthly Survey of Consumer Expectations. Inflation expectations also fell at the threeyear and fiveyear horizons to 2.5 and 2.8, respectively.
Those are findings likely to be welcomed by the Fed as it works to keep price pressures contained and inflation expectations anchored while it continues its policy shift to interest rate decreases. The Fed has cut interest rates twice since September, including a quarterpercentagepoint reduction last week, although the outlook for just how far rates will drop has become more muted following last week39;s victory by Donald Trump in the U.S. presidential election given expectations for him to quickly pursue stimulative tax reforms and other progrowth policies.
Inflation by the measure used by the Fed to set its 2 target for annual price increases…