Longer-Term Inflation Outlook Worsens Among Consumers, Risking Fed Rate Cuts

• Consumer outlook for longer-term inflation deteriorated in February, with expectations for inflation 3 years from now rising to 2.7% from 2.4% the prior month

• Inflation expectations 5 years from now also increased to 2.9% from 2.5% in January

• Rise in longer-run inflation outlook may unsettle Fed officials who expect to cut rates later this year as inflation moderates

• Survey respondents see slower price increases ahead for medical care, college, rent, home prices, and gasoline

• People with high school degrees or less tended to have higher longer-run inflation expectations than others