Americans expect inflation to run higher over the next one to three years, data from the Federal Reserve Bank of New York released Tuesday showed, with expectations for price increases reaching levels not seen since 2022 and 2023, respectively.
The central bank's June 2026 Survey of Consumer Expectations brought the median one-year inflation expectation to 3.7%, a 0.2-percentage-point jump from May's 3.5% that puts the reading at its loftiest point since September 2023. Over a three-year horizon, the median expectation advanced 0.2 percentage point to 3.3%, a level last reached in June 2022. The five-year outlook was unchanged at 3.0%.
Within the inflation breakdown, households anticipate medical care costs rising 9.4% over the next year and rent climbing 8.3% — both increases from the prior month. Expectations for food prices fell to 5.0%, and gas price expectations dropped 3.5 percentage points to 1.5%, the lowest level since August 2022.
Appearing on television Tuesday, New York Fed President John Williams offered a pair of assessments: "Inflation is still too high," he said, while also noting "I do feel a little bit more positive about the near-term inflation outlook because of the energy price declines that we're going to see," according to Bloomberg.
The survey also found improvement in consumers' outlook for both the labor market and personal finances. Respondents put the odds of losing their job over the coming year at 14.1%, down 1.0 percentage point, and estimated a 44.9% chance of landing a new position within three months of a layoff. Median expected earnings growth ticked up 0.1 percentage point to 2.8%. Separately, the share of respondents who anticipated quitting their jobs voluntarily dropped to 17.3%, touching its weakest reading since July 2023.
On the household finance side, a larger share of respondents said their financial situation had improved compared to a year ago, and more expect improvement in the year ahead. At 40.9%, the average probability assigned to U.S. stock prices being higher a year from now reached a level unseen since April 2021.
The June survey results arrive against a backdrop of elevated inflation. The Personal Consumption Expenditures price index, the Fed's preferred inflation gauge, climbed 4.1% in the 12 months through May, the first reading above 4% in three years. Much of that pressure traces to the U.S.-led conflict with Iran, which sent energy prices sharply higher, though a fragile ceasefire has since pulled fuel costs off their peaks.
At the June 16-17 gathering, the Fed kept its policy rate in the 3.50%-3.75% range; the economic projections published alongside that decision showed nine officials penciling in at least one additional rate hike before the end of 2026.
The survey was fielded from June 1 through June 30, 2026.