The April rise is troubling because it could raise consumers’ overall uncertainty about the economy, and create a pullback in demand, said Carola Binder, an economics professor at Haverford College. Also, less confidence that the Fed can control inflation could trigger panic buying or spur workers to demand higher wages because they believe inflation won’t stop, she added.

US consumers inflation expectations are down

While they’re overall more unsure about inflation, US consumers are expecting slightly lower inflation a year from now—6.3%—than last month, when they estimated a 6.6% rate. It’s the first drop since December. Meanwhile, they see wages growing considerably slower than inflation in the same period, at 3%.

Over  the next three years, they see inflation at 3.9%, slightly higher than last month’s measure.

The Fed tracks inflation expectations so it can step in before fears of future price increases become a self-fulfilling prophecy. While both short-term and long-term inflation expectations are high, they’re below record levels.

“We don’t see a wage price spiral, we see that companies have the ability to raise prices,” said Fed chair Jerome Powell in a press conference last Wednesday. “You don’t see those things yet, but I would say there’s no basis for feeling comfortable. We can’t run that risk. We can’t allow a wage price spiral to happen.”

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