According to the latest consumer expectations survey by the Federal Reserve Bank of New York, US inflation expectations have soared. The presumptive inflation rate has reached its highest point since 2013, and it is accompanied by forecasts of declining purchasing power, consumer debt, and concerns about the US real estate bubble.
New York Fed Consumer Expectations Report expects inflation to be 4.8% next year
After the government blocked the country for more than a year and the Federal Reserve increased the supply of M1 by 30%, American citizens were worried about inflation. Inflation has been so severe recently that US supermarkets have purchased as much as 25% of their supplies to cope with possible inflation and higher supply chain costs.
From 2020 to now, bacon has grown by 14%, bread by 7%, milk by 8%, and oranges by 8%. The cost of timber has risen significantly, the cost of natural gas has soared, and the real estate market has burst due to companies such as hedge funds and Wall Street types.
Although Fed members said that inflation is only “temporary,” the New York Fed stated in its latest consumer expectations survey that the inflation rate for the next 12 months is expected to be 4.8%. This indicator is the highest level recorded since 2013, and perceptions of Americans’ personal finances have declined.
The report pointed out: “Compared with a year ago, the perception of the family’s current financial situation has deteriorated, and more respondents said the situation is worse than a year ago.” The New York Fed survey added:
In contrast, the interviewees were slightly optimistic about the financial situation of their families in the coming year.
U.S. consumers borrow more, and next year the real estate market will have the highest uncertainty in history
Consumers surveyed by the New York Fed also indicated that the interest rate for borrowing one or more types of credit has jumped from 35% in October 2020 to 45% in February 2021.
The Consumer Expectation Survey pointed out: “Despite the largest increase in mortgage refinancing applications, the types of loans and credit scoring groups have increased significantly.” Although the number of Americans seeking credit continues to increase, the overall rejection rate of credit has jumped to The highest recorded rate since October 2018.
At the same time, as the stimulus funds ran out, Peter Schiff’s portal schiffgold.com released a report on “How Americans drew out credit cards.” The Federal Reserve data in the report showed that consumer debt increased by 10% in May. The report emphasized that “Americans now owe a total of $4.28 trillion in consumer debt.”
These figures come from debt instruments such as student loans, credit cards and auto loans. The data does not include mortgages, and the report shows that consumer debt increased by US$35.3 billion in May.
Economists and gold bug Peter Schiff do not believe that the U.S. Central Bank will raise interest rates in the short term because the economic foundation is stabilized by borrowing.
“The reason they will not fight inflation in the future is the same as the reason they are not fighting inflation now-because they cannot do this without crashing the economy,” Schiff said.
The New York Fed’s latest consumer expectations survey also shows that Americans may be worried about the U.S. real estate market because consumers have revealed that house prices will continue to grow steadily at a rate of 6.2% per year. However, the suspicion surrounding this prospect is that the New York Fed survey has recording.
Americans are Noticed Today, buyers are trying to bid on properties they have never seen or visited. In April, 47% of homes listed in the US became pending approval in less than 7 days.
How do you think the New York Fed’s latest consumer expectations survey set a record in this series? Please tell us your thoughts on this topic in the comments section below.
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