June 13 Reuters U.S. consumers39; inflation expectations one year from now worsened in May but there they were still generally bullish about the strength of the labor market, underscoring the imbalances facing the U.S. Federal Reserve this week as it grapples with how to rein in price pressures.

Median expectations for where inflation will be in one year rose 0.3 percentage point to 6.6, while they remained unchanged at 3.9 over a threeyear outlook, the survey released by the Federal Reserve Bank of New York on Monday showed. Uncertainty on where inflation will end up over that medium term rose to a series high.

A worsethanexpected key inflation reading last Friday, which detailed broadening price pressures, has caused investors to up their bets the U.S. central bank will have to be more aggressive to crush inflation that has remained around a 40year high for months.

Fed policymakers are expected on Wednesday to raise borrowing costs by half a percentage point to a range of between 1.25 and 1.50 as it seeks to cool demand across the economy without causing a spike in unemployment.

Americans are already changing their spending habits and there are increasing fears of either an outright recession or period of very slow growth as the Fed is forced to raise interest rates more quickly and higher than expected. 

Median household spending growth expectations jumped to 9.0, a rise of one percentage point and a record high for the series while the average perceived…