Consumers’ Expectations for Inflation Reach Highest Level Since 1995

“The concern with higher inflation expectations is that it can be self-fulfilling—what people and businesses expect to happen, often does.”

By Jarrell Dillard and Augusta Saraiva | February 24, 2025 at 07:54 PM

U.S. consumers’ long-term inflation expectations rose to the highest level in almost three decades on concerns that President Donald Trump’s tariffs will translate into higher prices.

Consumers expect prices to climb at an annual rate of 3.5 percent over the next 5 to 10 years, according to the final February reading from the University of Michigan. This rate is the highest since 1995, based on data compiled by Bloomberg, and was almost entirely driven by views among survey respondents who are Democrats.

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Consumers’ Expectations for Inflation Reach Highest Level Since 1995

“The concern with higher inflation expectations is that it can be self-fulfilling—what people and businesses expect to happen, often does.”

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