US consumers expect inflation to fall sharply, survey says

Minneapolis ( Business) — Americans expect inflation to fall sharply in both the short and long term, according to new data from the Federal Reserve Bank of New York.

In August, the median inflation expectations for one and three years fell to 5.7% and 2.8% respectively, compared to 6.2% and 3.2% in July, according to the Survey of Expectations of New York Fed Consumer Reports for August, published this Monday morning.

The worst of inflation might finally be over

The decline comes amid a continuing drop in gasoline prices. The national average price of a gallon of gasoline has fallen to $3.71, down significantly from its June high of more than $5.

The survey, which measures consumer expectations about headline inflation and the prices of food, gasoline, housing and education, is one of three key inflation indicators to be released this week. It will be followed by the consumer price index on Tuesday and the producer price index on Wednesday.

The central bank will closely scrutinize these and other data as it weighs the scope of an upcoming interest rate hike at its September 20-21 monetary policy meeting as it struggles to bring down historic inflation.

— This is a developing story and is subject to updates.