One of the biggest concerns for the Fed as they decide whether or not to raise interest rates this year is expected inflation. While prices and wages have been pretty stable over the last few years, if consumers and investors think the inflation rate will rise in the near future, the Fed might consider raising interest rates in response.
However, consumers don’t see that happening just yet.
One of the questions on the New York Fed’s Survey of Consumer Expectations asks respondents what they think inflation will look like in the near future.
The median consumer’s expectation for inflation in the next year has been dropping for the last few months. In September, the median consumer expected prices to be just 2.73% higher in the next year, tied with April 2015 as the lowest expected inflation rate in the survey’s two year history.
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