That could spell trouble for the central bank, which relies on low and stable inflation expectations as an enabler of its low-interest-rate plans. The University of Michigan’s consumer survey’s two inflation expectations indexes both surged in preliminary May data released Friday. The measure that gauges near-term inflation expectations popped to 4.6 percent from 3.4 percent. The numbers are subject to revision and mark just one data point, but they come at a time when market-based inflation expectations are surging and real-world price gains are picking up faster than expected. That matters for the Fed, which is tasked with keeping inflation low and stable while fostering full employment.

Source: New York Times May 14, 2021 16:52 UTC