US Consumer Inflation Expectations Climb to Nearly 3-Year High in April

Recent data reveals that U.S. consumers' inflation expectations for the medium term have increased, reaching the highest levels in nearly three years, with three-year inflation expectations rising to around 3.2%. However, longer-term expectations, such as five-year outlooks, have slightly decreased, indicating some belief that inflation may moderate over time. These inflation concerns coincide with consumers accelerating purchases in April to avoid anticipated price hikes from tariffs, particularly in categories like electronics and appliances. Despite rising inflation worries and economic uncertainty, consumer fundamentals remain solid with low unemployment and steady income growth. Meanwhile, consumers’ confidence in the job market has declined, with more individuals expecting higher unemployment and worsening personal financial situations in the near future. Federal Reserve officials continue to monitor these indicators closely as they assess the risks of persistent inflation alongside potential economic slowdown.