Consumer Inflation Expectations Fall to Lowest Level in a Year

Consumers report lower expected price increases across several key categories like gas, rent, and medical care.

Published on Feb. 9, 2026

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Americans' expectations for inflation over the next year fell in January to the lowest level in 12 months, according to a survey released by the Federal Reserve Bank of New York. The median expectation for inflation one year from now declined to 3.1 percent from 3.4 percent in December, matching the January 2025 reading. The decline marks a continuation of the cooling in inflation expectations that began after peaks in mid-2022.

Why it matters

The New York Fed findings align with other recent surveys showing a broad-based cooling in inflation expectations across the economy, suggesting price pressures continue to moderate, defying the forecasts of some economists and Fed officials that tariffs would push up prices this year.

The details

Consumers reported lower expected price increases across several key categories, with gas price expectations falling sharply, rent expectations dropping, and medical care cost expectations declining. Food price expectations held steady, while college education cost expectations rose. Home price growth expectations fell to 2.9 percent, the lowest reading since July 2023. The survey also showed modest improvements in labor market expectations, with the mean perceived probability of losing one's job in the next 12 months decreasing and the probability of finding a job within three months if currently unemployed rising.

  • The median expectation for inflation one year from now declined in January 2026.
  • The January 2026 reading matched the January 2025 level.

The players

Federal Reserve Bank of New York

The regional Federal Reserve bank that conducts the Survey of Consumer Expectations, which showed the decline in inflation expectations.

University of Michigan

The institution that conducts the preliminary February consumer sentiment survey, which also showed a decline in year-ahead inflation expectations.

Federal Reserve Bank of Atlanta

The regional Federal Reserve bank that conducts the Business Inflation Expectations survey, which showed firms' year-ahead unit cost expectations have fallen considerably since a peak in April 2022.

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The takeaway

The convergence of falling inflation expectations among both consumers and businesses suggests price pressures continue to moderate, defying the forecasts of some economists and Fed officials that tariffs would push up prices this year.