Inflation expectations of US population return to pre-tariff levels

Data from the June survey of the Federal Reserve Bank of New York indicated a softening of consumer inflation expectations in the US one year ahead to 3%. At the same time, annualized inflation estimates for 3 and 5 years ahead remained unchanged at 3% and 2.6%, respectively.

As noted by Bloomberg, the public's inflation estimates have returned to levels seen before Donald Trump's announcement of high tariffs on imports. The turmoil that followed Trump's decision caused inflation expectations to jump to 3.6% in April. However, since then, a series of tariff postponements and negotiated trade deals have eased its impact on employment and inflation.

Nevertheless, the agency drew attention to recent announcements by the US authorities of their intention to raise import tariffs again for several trading partners. Uncertainty in the American and global economy remains.

At the same time, assessments of the state of the US labor market, presented in the New York Fed survey, turned out to be mixed. Expectations of likely job loss in the coming year fell to the lowest level since December. However, estimates of the likelihood of finding a job if the current job is lost also declined.