Inflation remains high, indicating it will likely persist. Consumer expectations for inflation have increased, and consumer prices have risen 3.2% from last year. Additionally, wholesale prices have surged 0.6%, adding to concerns that inflation may be more persistent than anticipated. These factors suggest the Federal Reserve may keep interest rates higher for an extended period to combat inflation.
Consumers increasingly doubt the Federal Reserve can achieve its inflation goals anytime soon, according to a survey. This is because longer-term inflation expectations have risen, with the three-year outlook increasing to 2.7% and the five-year outlook jumping to 2.9%. This is well ahead of the Fed's 2% goal for 12-month inflation, indicating that the central bank may need to keep policy tighter for longer.
