Americans, including the Republicans, fear a higher inflation this year now this year

Washington
Cnn
–

The Americans fear that faster inflation will be on the horizon.

The latest consumer survey by the University of Michigan, which was released on Friday, showed that the inflation expectations of the Americans have increased to 4.3%for the coming year, which rose a full percentage point from January to the highest level since November 2023 .

“This is only the fifth time in 14 years, in which we have recorded such a great increase in inflation in inflation in the regulations in the regulations in the regulations,” said Joanne Hsu.

The sentiment index of the survey also declined for the second time in a row in February and has decreased by 5% from January since July 2024.

“The decline was omnipresent because Republicans, independent and Democrats all publish the mood together with consumers in age and wealth groups from January,” said HSU.

The interviews for Michigan’s survey were completed on February 4, just a few days after the Trump government had announced 25% tariffs in Mexico and Canada.

Shortly after the announcement, the three countries made a contract for 30 days to delay President Donald Trump for 30 days, which means that consumers and companies still have to do with the unpleasant possibility of higher costs in the future.

In the meantime, Trump’s delivery of an additional 10% service of Chinese goods came into force on Tuesday and was immediately met by China retaliation.

“The consumer has sent a warning shots over the sheet of the new Trump government that the introduction of import duties will increase inflation this year one percentage point, and as a result, the consumer mood fell” an analystnote on Friday.

“The consumer is confident that one thing is only and one thing, and that is that Trump 2.0’s growth guidelines are inflationary,” he added.

The Federal Reserve commissioned to manage interest rates pays attention to the perception of prices by the Americans. This is because the inflation expectations can sometimes be fulfilling. So if consumers expect inflation to be picked up, they can change their expenses.

The Fed focuses especially on long -term inflation expectations based on various surveys and measures, including Michigan’s closely observed survey. This latest number was not as worrying as the year. Pandemic.”

After the first Trump administration had hit tariffs for various goods in 2018, Fed economists developed simulations on the appropriate way for monetary policy based on various tariff scenarios. In a situation in which the inflation expectations rose, the Fed saw it appropriate to increase interest rates.

The lined interest rate cuts last month after they reduced a full percentage point over three meetings last year. Fed officials have signaled that they want to be careful with further interest cuts. According to Futures, Wall Street does not expect price reductions in March.