U.S. consumers' inflation expectations slid further in August as gasoline prices extended their steep decline from June's record high, a development likely to be welcomed by Federal Reserve policymakers weighing how big an interest rate hike to deliver next week, Reuters reported. Consumers in August saw inflation at 5.75% over the next 12 months, down from 6.2% in July and the lowest rate since October 2021, the New York Fed's monthly consumer expectations survey showed on Monday. They also foresaw price increases averaging 2.8% over the next three years — the lowest pace since late 2020 — after pegging inflation over that horizon at 3.2% in July. Moreover, consumers last month saw price increases running at 2% over the next five years, matching the Fed's own targeted inflation level. That was down from 2.35% in July and 3% at the start of the year when the New York Fed first started asking about inflation expectations over that time frame.
