NY Fed survey reports rising near-term inflation expectations in June

By Michael S. Derby

Tue, July 7, 2026 at 8:03 AM PDT 3 min read

By Michael S. Derby

July 7 (Reuters) - Americans grew more concerned about near-term inflation pressures in June even as they projected moderating gasoline price gains and a more upbeat view on current and future personal ‌finances, a Federal Reserve Bank of New York report released on Tuesday said.

Inflation a year from now was ‌seen at 3.7% in June, up from 3.5% in May, for the highest reading since September 2023, the bank said in its latest Survey of ​Consumer Expectations.

Meanwhile inflation three years from now was seen at 3.3% from May's 3.1%, with the June reading at its highest level since June 2022. Five-year ahead expected inflation, which is most closely watched by central bank officials, held steady at 3%.

The rise in near-term inflation expectations comes as prevailing inflation readings have been under considerable pressure from a surge in energy prices due ‌to the Middle East war. The overall ⁠May personal consumption expenditures price index was up by 4.1% in May from the same month a year ago, from April's 3.8% gain.

The conflict snared the transit of critical energy products and ⁠other goods and drove sharp increases in prices for things like gasoline and diesel, which came on top of inflation pressures that had already been overshooting the Fed's 2% inflation target.

The hot phase of that conflict appears to be now over and energy prices ​have ​retreated, in turn suggesting future price pressures will moderate. In a ​television interview earlier on Tuesday, New York Fed President ‌John Williams said, "inflation is still too high," while adding "I do feel a little bit more positive about the near-term inflation outlook because of the energy price declines that we're going to see."

Fed officials closely track inflation expectations because most agree where the public thinks price pressures will go strongly influences where price pressures currently stand. They largely agree that the public eventually expects price pressure to return to target due to the stability of longer-term expectations readings.

In his first press conference ‌as Fed Chairman, Kevin Warsh said last month that "I am pleased to ​report that members of the [Federal Open Market Committee] are unambiguous and unanimous: ​This Committee will deliver price stability."

The Fed left its ​interest rate target range unchanged at the June policy meeting at between 3.5% and 3.75%, ‌although a number of central bankers then eyed the ​need for rate hikes later ​this year given inflation worries.