Federal Reserve Study: Consumers Do Not Expect Inflation Spike Will Last Long
Published Wednesday, February 16, 2022 at: 8:35 AM EST
Consumers do not expect the spike in inflation will last long. That’s the conclusion of six economists from the New York Federal Reserve Bank.
“Besides its tragic human toll, the pandemic has brought about extraordinary economic dislocation, including unprecedented supply and demand imbalances that have resulted in a sharp rise in inflation,” says a Thursday, Feb 14, post from the six economists who examine the results of a monthly survey of consumer expectations for inflation conducted by the New York Fed.
“Our measures indicate that consumers seem to recognize the unusual nature of the current inflation experience,” concluded the economists.
In December, the annual inflation rate hit a 40-year high. Last week, the Bureau of Economic Analysis reported inflation surged higher still, to a 7.5% annual rate in January, adding to inflation fears. In the early 1980s, inflation resulted in stiff rate hikes by the Federal Reserve, causing a long recession from July 1981 to November 1982. Recessions trigger bear markets.
Which makes the New York Fed’s analysis of this monthly survey of consumer inflation expectations important and timely: Consumers in January expected a 5.8% inflation over the next 12 months, and a decline to 3.5% in three years.
Although inflation is alarming, the Fed’s analysis is one of several signs the inflation spike will not last long.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
©2022 Advisor Products Inc. All Rights Reserved.
- Tax And Financial Planning Are Not So Simple
- New IRS Rules Make It Much Easier To Retire Early
- Facing High-Growth And High-Inflation, Fed Policy Lurched Ahead Today
- An Asset Protection Tip For Professionals And A Way For Pre-Retirees To Catch Up On Retirement Saving
- Tax Filing Season To Begin Two Weeks Earlier This Year
- Make This Financial Resolution For 2022
- Defying Pandemic, S&P 500 Is Up 27.4% YTD
- 7 Signs The Economy Is Doing Better Than People Think
- Market Melt-Up Risk Grows
- Amid Rapid Crosscurrents, A New Wave Of Small Business Is Emerging
- Omicron Variant: What It Means To Investors?
- Special Report: Long-Term U.S. Equity Investments And Demographics
- Things Really Are Different This Time.
- Is A Market Melt-Up Under Way?
- An In-Depth Report For Investors On Key Economic Fundamentals