NY Fed Survey: Inflation Expectations Stable, Labor Market Improves

Inflation Expectations

• 💡 Inflation expectations for one, three, and five years out remained unchanged according to the New York Fed survey.
• ⚠️ While stable, these expectations are noted as being somewhat elevated.
• 📈 Expectations for food, gas, medical care, and rent saw a significant increase.
• ⚖️ The data provides fodder for both hawks (pointing to elevated levels) and doves (pointing to stability).

Labor Market Outlook

• 📉 Expectations for unemployment decreased slightly, though they remain elevated.
• 😟 Concerns about job loss also saw a small decrease.
• 🤝 Confidence in finding a new job if one is lost has increased.
• 📊 All three labor market indicators suggest a positive outlook for the jobs market.

Economic and Market Trends

• 🏠 Expectations for housing, income, and spending were all higher.
• 📊 The overall economic outlook for the current and next quarter appears healthy, based on available data.
• 📈 A backup in yields is occurring, which could be a concern for the Fed, especially if it moves in the opposite direction of expected rate cuts.
• 🌐 Market commentary suggests influences from rising Japanese yields and speculation about potential Fed Chair Kevin Hasset potentially being more beholden to the president, though the direct impact on rates is unclear.