The NY Fed survey shows that the outlook for credit access reached the record on the whole inflation anticipations leaps

April 11, 2023: Consumers are getting more pessimistic regarding inflation and their access to credit, the results of a survey the New York Federal Reserve released on Monday.

Respondents anticipated prices to increase by half a percentage point in the year ahead, which equates to a 4.7% annual gain, the central bank’s Survey of Consumer Anticipations for March showed.

That’s the initial time the near-term outlook surged since October and went through counter to the narrative by Fed officials that they anticipate inflation to decrease as a series of interest rate increases take hold. In their latest economic projections, policymakers expect inflation, which includes food and energy prices, to decline to 2.5% in 2024.

The current every-year outlook is down from 6.6% at the same time in 2022 but is running forward of the Fed’s 2% inflation aim. Expectations from three to five years were changed, at 2.8% and 2.5%, respectively.

Consumers anticipate gas prices to rise by 4.6% in the year ahead, much less than the February outlook, and they experience food prices up 5.9%, a decrease of 1.4 percentage points from last month’s survey.

At the same time, consumers see their approval of credit diminishing.

That reporting that credit is much or somewhat more challenging than a year ago rose to 58.2%, the increase ever in a data series that relates to June 2013. Hence, the expectation that credit will be more challenging to get a year from now increased to nearly 53%, up from 48.8% in February.

The outlook for minimum debt payment in the upcoming year increased by 0.3 percentage points to 10.9% of respondents.

The survey showed less optimism regarding the stocks, with just 35% anticipating higher prices yearly, down 1.4 percentage points monthly.

The results come as the Fed states whether to continue increasing interest prices or to go on hold when it comes in contact again in May.