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People shop at a grocery store in Brooklyn on May 13, 2025 in New York City. <\/p>\n
Spencer Platt | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
Fears earlier this year that President Donald Trump’s tariffs would result in a sharp inflation spike have completely receded, according to a New York Federal Reserve survey released Tuesday.<\/p>\n
The central bank’s monthly Survey of Consumer Expectations shows that respondents in June saw inflation at 3% 12 months from now. That’s the same level it was in January \u2014 before Trump took office and began saber-rattling over trade.<\/p>\n
The level marked a 0.2 percentage point decline from May and a retreat from the 3.6% peak hit in March and April.<\/p>\n
Since April, Trump has gone from slapping across-the-board 10% tariffs plus a menu of so-called reciprocal duties against U.S. trading partner to a more conciliatory approach involving ongoing negotiations.<\/p>\n
Thus far, tariffs have yet to show up in most inflation readings. The consumer price index rose just 0.1% in May<\/a>, according to the Bureau of Labor Statistics, though the annual inflation rate of 2.4% remains above the Fed’s 2% goal.<\/p>\n Inflation expectations at the three- and five-year horizons were unchanged at 3% and 2.6% respectively, according to the survey.<\/p>\n While the headline inflation outlook eased, respondents still expect higher prices in several key individual categories. The survey pointed to expectations for a 4.2% increase in gas prices, 9.3% for medical care \u2014 the highest since June 2023 \u2014 and 9.1% for both college education and rent. The outlook for food price increases was unchanged at 5.5%.<\/p>\n Employment metrics also showed some improvement, with a 1.1 percentage decrease in the expectation for a higher unemployment rate a year from now. Also, the average expectation for losing one’s job fell to 14%, a 0.8 percentage point drop and the lowest reading since December.<\/p>\n<\/div>\n<\/div>\n\n
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