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18h ago

New York Fed Survey Shows Financial Strain as Inflation Expectations Stay Elevated

Markets see a quarter-point cut at this week's Fed meeting, a move likely to draw formal dissent.

Renovations continue at the Federal Reserve Board building in Washington, D.C., U.S., November 14, 2025. REUTERS/Elizabeth Frantz/File Photo
A side-view shot of a young female adult smiling whilst on a beach walk at Newton-by-the-Sea in Northumberland, North East England. She is looking straight ahead, to the left of the frame, with a wide contented smile. She is wearing a winter coat and woollen bobble hat, and behind her is a view of the beach and sea beyond.

Overview

  • Households reported a notable deterioration in their current finances in November and a slight downgrade to their year‑ahead outlook.
  • Inflation expectations were unchanged at 3.2% for one year and 3.0% for both three- and five-year horizons, remaining above the Fed’s 2% goal.
  • Perceptions of the job market improved, with the probability of job loss falling to its lowest since December 2024 and fewer respondents expecting higher unemployment.
  • Year‑ahead medical cost expectations jumped 10.1%, the highest since January 2014, while home price expectations held at a 3% rise.
  • The survey was released on the eve of a policy meeting where forecasters expect a 25‑basis‑point rate cut to 3.50%–3.75%, with significant opposition anticipated from officials focused on inflation.