U.S. consumers expect stable inflation over the next year even as they anticipate higher wages and gas prices, Federal Reserve Bank of New York data showed on Monday.
People polled in the New York Fed's survey of consumer expectations are aligned with U.S. monetary policymakers who see prices as stable near their 2 percent annual goal.
The survey showed one-year ahead inflation expectations were unchanged at 2.8% last month, while a three-year inflation figure ticked up 0.1 percentage point to 2.9%.
People forecast earnings to rise 2.6% over the coming year, the largest figure since September. They also see gas prices rising 4.7%, the most since June. oil prices have shot up 40% this year.
Expectations for the cost of food, healthcare, college education and rent were little changed.
Stable and low inflation is one of the main reasons that the Federal Reserve, having raised interest rates four times last year, is now taking a wait-and-see approach to more tightening.
Fed officials last raised their target policy rate in December to 2.25 to 2.50% but signaled after that point that they would be "patient" before deciding future moves.
The Fed is also conducting a broad policy review that may result in the central bank welcoming inflation that is slightly and temporarily over its target. Some policymakers and analysts think the Fed now has far more ability to respond to upward spikes in prices rather than persistently low readings. That is because changing interest rates has less effect on the economy when rates fall to zero.
Many policymakers are also welcoming rising wages rather than assuming that they will force businesses to raise prices.