Summary: The New York Fed's April household survey found a slight increase in expected inflation over the next 12 months to 3.6% from March's 3.4%, while expectations at the three- and five-year horizons remained unchanged at 3.1% and 3.0%, respectively. Respondents lowered their year-ahead gasoline inflation forecast sharply and showed moderated views on food price inflation. The survey results come against a backdrop of rising measured inflation, supply chain disruptions and geopolitical tensions that have pushed gasoline prices higher.
Americans surveyed in April showed little sign of panic about a broad, sustained uptick in inflation even as several near-term price pressures intensified. The Federal Reserve Bank of New York's monthly Survey of Consumer Expectations reported that the median household expected inflation one year ahead at 3.6%, up from 3.4% in March.
Looking further out, households' inflation expectations at the three-year horizon held steady at 3.1% and at the five-year horizon at 3.0%. The April year-ahead projection matched year-ahead expectations recorded in the April 2025 survey, according to the report.
The survey also registered a notable reduction in households' expectations for future gasoline price increases. The April year-ahead gasoline inflation projection fell sharply to 5.1%, down from March's 9.4% reading. Expectations for year-ahead food price inflation likewise moderated in April.
These calmer household views on the future path of inflation contrast with several developments pointing to growing near-term price pressures. The ongoing war in the Middle East has been linked in the survey's commentary to surging gasoline prices and related supply chain disruptions. The report noted that rising current inflation pressures have ties to large import tax increases implemented by President Donald Trump as well as supply interruptions stemming from the conflict.
Official inflation readings have reflected an acceleration in recent months. The personal consumption expenditures price index, the Federal Reserve's preferred gauge, rose by 3.5% in March from the same month a year earlier, a marked increase from February's 2.8% year-over-year gain. The Fed's long-run inflation target is 2%.
Market participants and some Federal Reserve officials have reacted to the higher readings and evolving risks. With the war unresolved and global growth pressures mounting, market expectations around longer-run inflation have moved higher. The survey noted that concerns about inflation have intensified to the extent that a number of Fed officials signaled opposition to the central bank's recent choice to keep a leaning toward eventual interest rate cuts.
Data published by the New York Fed earlier in the week showed a large uptick in supply chain disruptions similar in nature to those seen during the COVID-19 pandemic, presenting another vector for upward price pressure. Gasoline prices have been on a steady rise and the possibility that war-related disruptions could drive further increases is highlighted in the report.
New York Fed President John Williams, speaking before the release of the survey, emphasized the importance of anchored expectations. "Inflation expectations have remained well-anchored despite the deluge of shocks," he said, adding that market estimates indicate a similar pattern. "This is critically important, because well-anchored expectations have proven to be invaluable to ensuring price stability during unexpected shocks and extreme uncertainty," Williams said.
Beyond inflation outlooks, the survey painted a mixed picture of household finances and labor market expectations. Respondents reported mixed views about their current and future personal finances in April. Households also perceived credit as being harder to obtain now and expected credit conditions to be tighter in the future compared with March.
Expectations for hiring, earnings and income were similarly mixed in the April responses. Notably, households projected higher unemployment a year from now, according to the survey results.
Overall, the New York Fed's April survey suggests that while households are registering the higher measured inflation and supply shocks affecting the economy, their longer-run inflation expectations remain comparatively steady. That relative calm in consumer expectations exists alongside measurable near-term pressures and growing uncertainty tied to geopolitical developments and supply chain stresses.
Note: The article reports findings and commentary contained in the Federal Reserve Bank of New York's April Survey of Consumer Expectations and related data released by the New York Fed.