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77% of Americans are worried about inflation

WASHINGTON (Axios): A survey from data firm CivicScience provided first to Axios shows more than three-quarters of American consumers are concerned about inflation.

Between the lines: 42% of those respondents said they were “very concerned,” which was more than double the share (17%) that said they were “not at all concerned.”

Why it matters: As I’ve written before, inflation is a self-fulfilling prophecy and is driven largely by expectations.

When people expect costs to rise they behave accordingly — they demand higher pay, raise rents and increase the cost of goods and services. All of those things push inflation higher.

Why you’ll hear about this again: Perhaps the survey’s most intriguing data point is that young people who have never before experienced runaway inflation are the most worried.

Gen Z reports they are “very concerned” at the highest rate, although overall concern is greatest among people between 35 and 54.

One level deeper: Expectations for inflation also align closely with expectations for how much longer the coronavirus pandemic will impact the economy.

Of those who expect the virus to last just 1-3 more weeks, 73% report being “very concerned” and nearly 90% say they are at least somewhat concerned.

Conversely, among those who expect the pandemic’s effects to stick around for at least six months, just 38% are very concerned.

What’s happening: The public looks to be catching up to market participants in their worries about inflation and responding to rising prices, especially for rent and gasoline. Those jumped by 9% and 9.6%, respectively, in February, according to the New York Fed.

Investors have been selling off U.S. Treasury bonds, recently pushing yields on government debt to their highest levels since January 2020, and sending 5-year breakeven inflation rates to the highest since 2008 last week.

The latest survey of global asset managers commissioned by Bank of America found that inflation is the number one risk for the market, displacing COVID-19 for the first time since February 2020.

A net 93% of investors in the survey said they expect inflation to rise in the next 12 months, the highest reading in the history of the survey, which dates back to at least 1995.

The last word: Chair Jerome Powell and the Fed appear to be getting what they want with rising inflation that should soon push PCE, the Fed’s favored inflation gauge, above the central bank’s 2% target.

But whether inflation will remain “anchored” there and not spike to problematic levels remains to be seen.