Fed’s upcoming rate cut to be historically ‘different’: Kyle Wool
Dominari Financial CEO Kyle Wool weighs in on Kamala Harris’ economic agenda and discusses his top tech stocks on ‘Mornings with Maria.’
A new report released Monday by the Federal Reserve Bank of New York found that U.S. consumers see inflation easing, but that worries about the labor market and managing household debt loads rose.
The New York Fed's latest Survey of Consumer Expectations found that respondents continue to see inflation at 3% a year from now and 2.8% in five years, findings that are unchanged from the prior month. It found that consumers' price expectations over the next year involved larger increases for gas, rent and medical care, as well as smaller increases for food and college expenses.
The survey also found that for the third straight month, respondents' expectations of missing a debt payment in the next three months increased with a 0.3 percentage point rise in August to 13.6%, the highest level since the early stages of the COVID pandemic in April 2020.
Consumers' views of the labor market were mixed in the report, with fewer worries about losing a job but also less optimism about voluntarily leaving a current job or finding a new job after losing their present role.
US ECONOMY ADDED 142,000 JOBS IN AUGUST, MISSING EXPECTATIONS
The New York Fed's survey found rising concerns about consumers missing a debt payment in the next three months. (Paola Chapdelaine for The Washington Post via / Getty Images)
The perceived probability of an individual losing their job in the next 12 months fell by 1 percentage point to 13.3%, below the 12-month trailing average of 13.7%, while the probability of leaving a job voluntarily also fell to 19.1% from 20.7%.
The report also found that the perceived probability of finding a job if an individual lost their job decreased, with a decline of 0.2 percentage points to 52.3% – below the 12-month average of 53.9%.
JOBS REPORT IS A BOOM FOR MIGRANTS, SLUMP FOR AMERICANS
The New York Fed's survey found rising pessimism about finding a new job after losing a prior job. (Spencer Platt / Getty Images)
Expectations for growth in household incomes increased by 0.1 percentage points to 3.1%, while spending growth expectations increased by the same amount to 5.0%.
The report comes ahead of the release on Wednesday of inflation data for the month of August when the Labor Department releases the latest figures for the consumer price index (CPI).
CASH IN MONEY MARKET ACCOUNTS AT RECORD LEVEL AS RATE CUTS LOOM
Fed Chair Jerome Powell recently signaled that the "time has come" for interest rate cuts. (Roberto Schmidt/AFP via / Getty Images)
Markets will be closely monitoring the CPI print as they assess how much the Federal Reserve will cut interest rates by when the central bank's policy committee meets next week. The benchmark federal funds rate currently sits at a range of 5.25% to 5.50%, the highest level in 23 years, while analysts debate whether the Fed will lower rates by 25 or 50 basis points.
Fed Chair Jerome Powell has signaled that the "time has come" for interest rate cuts amid signs of progress in tamping down inflation.
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July's CPI came in at a year-over-year increase of 2.9% – well below the 9.1% June 2022 peak in this inflationary cycle, though it remains above the Fed's 2% target rate.
