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Inflation expectations for next year surge to record high

WASHINGTON (Foxnews): Inflation expectations for the next year climbed for a seventh straight month in May to a record high, according to a new survey from the Federal Reserve Bank of New York.

Median one-year ahead inflation expectations last month rose 0.6 percentage points to 4%, the highest since the New York Fed’s Survey of Consumer Expectations began. Inflation expectations for the next three years climbed from 3.1% to 3.6%, trailing only the August 2013 print.

Respondents over 60 years of age and those earning a high school degree or less were most concerned about future inflation.

Inflation expectations over the short-term have in recent months been in increasing at a faster pace than for the medium-term. The 0.4 percentage point difference between the two is the biggest spread on record.

The gap comes as the Fed has said it expects inflation pressures to be “transitory” due to a base effects skew that occurred when prices declined at the start of the pandemic.