New York Fed inflation expectations rise to 3.9% for the year ahead
The New York Fed’s September survey found one-year inflation expectations at their highest since May 2023, while longer-term views changed little.
By Sarah Jenkins · Chief Macro Economics Correspondent
· 2 min read
New York Fed inflation expectations for the coming year rose to 3.9% in September, up 0.3 percentage point from August and the highest reading since May 2023. The same survey put expected one-year household spending growth at 5.5%, also up 0.3 point and the highest in the series since May 2023.
The figures come from the Federal Reserve Bank of New York’s Survey of Consumer Expectations. They report households’ views about future inflation rather than a measure of recorded price changes. Readers looking for how observed inflation is calculated can see this guide to how inflation is measured.
What does the New York Fed inflation expectations survey measure?
The survey separates expectations into three time frames: one year ahead, three years ahead and five years ahead. The New York Fed describes these as short-, medium- and longer-term horizons. Its three- and five-year questions ask respondents about inflation during a one-year period two and four years in the future, respectively.
September’s increase was concentrated at the nearer horizons. Median three-year inflation expectations rose by 0.1 percentage point to 3.3%, while the five-year reading was unchanged at 3.0%, according to the New York Fed.
- One-year expectation: 3.9%, up 0.3 percentage point from August.
- Three-year expectation: 3.3%, up 0.1 percentage point.
- Five-year expectation: 3.0%, unchanged.
The September one-year result was higher than the 3.6% recorded in the April 2026 survey. At that time, three-year expectations were 3.1% and five-year expectations were 3.0%.
How is the 3.9% figure calculated?
The 3.9% result is a median expected inflation rate, rather than an arithmetic average or a direct point forecast. Respondents assign probabilities to inflation falling within specified ranges over the next 12 months. The New York Fed fits a distribution to each respondent’s answers and derives an expected inflation rate for that respondent, then reports the median across respondents.
The Survey of Consumer Expectations is a nationally representative, internet-based rotating panel of roughly 1,300 household heads. Participants may stay in the panel for as long as 12 months, with a roughly equal number entering and leaving in each month, according to the New York Fed.
What else did households report in September?
Median expected household income growth increased 0.1 percentage point to 3.1%, its highest level since February 2025. Expected one-year nominal spending growth reached 5.5%, above its 12-month trailing average of 5.0%.
The New York Fed also said households’ assessments of their financial position worsened. Larger shares of respondents said their situation was worse than a year earlier and expected it to be worse a year ahead.
This story draws on original reporting from CNBC.
