Americans Are Expecting Higher Prices. That Could Unnerve the Fed.

Published On Feb 25, 2025, 10:16 AM

More Americans are preparing for higher prices due to the impact of President Trump's economic policies. Inflation expectations are rising, indicating that consumers and businesses might soon alter their practices in response to potential price increases. Surveys show declining consumer confidence, with specific concerns about rising food prices and tariffs. Economists warn that if inflation expectations continue to grow, it could complicate efforts by the Federal Reserve to manage inflation effectively. Key to controlling inflation is keeping these expectations in check to avoid a repeat of past inflationary cycles, where expectations fed into actual inflation rates, necessitating aggressive interest rate hikes and recessionary measures.