Rising US inflation expectations and a deteriorating job outlook may prevent the Federal Reserve from adjusting interest rates this month.
TL;DR
U.S. inflation expectations increased in December, while job outlook hit a 12.5-year low, creating a policy divide at the Fed that may delay interest rate adjustments this month.
According to a monthly survey by the New York Odaily Reserve, U.S. inflation expectations rose in December, while views on job opportunities fell to their lowest level in at least 12.5 years. The report stated that consumers expect prices to rise 3.4% over the next year, up from 3.2% in November. Consumers' estimates of the probability of finding new work after losing their jobs fell to 43.1%, the lowest level since the bank began conducting its consumer expectations survey in mid-2013. These figures highlight the divergence among Federal Reserve officials who are more concerned about inflation and those who believe there is a greater risk of rising unemployment. This gap is likely to prevent the Fed from adjusting interest rates at its next policy meeting later this month. (Jinshi)