U.S. consumers expect prices to rise more slowly, according to the Federal Reser...
A customer shops for Thanksgiving ham at a grocery store in Los Angeles, California U.S. November 21, 2017. REUTERS/Lucy Nicholson
The survey of consumer expectations, published on Monday, is one of the Fed’s price gauges as it weighs the need for rate rises. It showed one- and three-year ahead inflation expectations were down 0.2 percentage points to 2.8 percent last month, with sharp declines in expected medical care expenses. Both the one- and three-year gauges had been roughly unchanged since April 2018.
The Fed is also conducting a broad policy review that may result in the central bank welcoming inflation that is slightly and temporarily over its target. Some policymakers and analysts think the Fed now has far more ability to respond to upward spikes in prices rather than persistently low readings. That is because interest rate cuts lose their potency as those borrowing costs approach zero.
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