Household worries over finances hit highest level since July 2022, New York Fed survey shows
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- U.S. households report rising financial distress, with 13.3% viewing their situation as 'much worse' than 12 months ago — the highest since July 2022
- Federal Reserve Bank of New York releases its Survey of Consumer Expectations showing 43.7% of respondents feel financially worse off than a year ago, the highest share since January 2023
- Consumers expect household spending growth to slow to 5% over the next year, down 0.4 percentage points from April, even as rent inflation expectations jump to 7.4%
- Inflation expectations remain steady at 3.5% for one year ahead, despite fears about energy prices linked to the Iran war, with food price outlook rising to 5.8%
Why it matters: The worsening household sentiment signals growing economic strain even as inflation expectations hold steady, making it harder for the Fed to justify rate cuts by June 17 despite market hopes. The divergence between financial anxiety and stable inflation views complicates monetary policy.
