US inflation expectations unchanged in October

The Federal Reserve Bank of New York’s October Consumer Expectations Survey showed that consumers’ inflation expectations held steady at 3.9% for the short term, 3.3% for the medium term and 3.0% for the long term, unchanged from the prior reading. The survey also showed that expectations for the unemployment rate rising climbed to their highest level since April 2020. The stability in inflation expectations matters because it suggests households are not yet pricing in a sharp acceleration in price growth, even as labor-market concerns build. The rise in unemployment expectations points to growing caution among consumers about the job outlook. Next, investors will watch whether these expectations shift in the coming months and how they feed into the Fed’s assessment of inflation and employment conditions.