Who will be above 2.3% for the year ending in September 2026?

NY Fed SCE Sept: median 1y inflation expectations 3.9% (+0.3, highest since May 2023); 3y 3.3% (+0.1); 5y still 3.0%. Household spending-growth expectations also hit 5.5% (+0.3), another May 2023 high.

How does the Federal Reserve’s view of the price of goods and services differ from that of a consumer? In today's "Street Level" post, Research Director Kartik Athreya explores this topic from the perspective of a central banker. https://libertystreeteconomics.newyorkfed.org/2026/10/prices-prices-prices-overall-inflation-and-the-costs-you-care-about/

Fed minutes: “With regard to the outlook for monetary policy beyond the current meeting, most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end.” https://www.federalreserve.gov/monetarypolicy/fomcminutes20260916.htm

Kevin Warsh wants investors to watch the economy, not the Fed. But two of his deputies stepped in last week and the probability of an October rate hike fell to around 25% from 70% ahead of any major new data. Why weaning the markets off Fed signals is harder than it sounds

This ho-hum labor market report doesn't really change the story for the Fed, whose senior officials had gone out of their way this week to signal that an October rate hike probably wasn't their base-case. The biggest development was what it didn't show: few signs from wages or the unemployment rate that the labor market is tightening in ways that would add meaningfully to price pressures. The September CPI, due Oct. 14, was always going to be more important than this report, which nevertheless takes some of the hawkish edge off of the recent repricing of the Fed's path in markets.

Fed Vice Chair Philip Jefferson signals officials may want more time before raising rates again, echoing NY Fed's John Williams. Two of the Fed's top leaders are now obliquely casting doubt on an October hike that had been increasingly priced by investors a few days ago. From Jefferson’s talk: “As we look ahead, my view is that any future adjustments in policy should be determined by carefully examining trends in the data, the evolving outlook, and the balance of risks. Since our September meeting, yields across the term structure have increased further, a sign that investors are reassessing the evolving macroeconomic landscape. My colleagues and I will need to come to our own judgment, which may take more time. I will continue to assess whether underlying trends suggest that inflation will return to target with sufficient speed. With more data in hand, such trends may lend themselves to better discernment, as may the appropriate stance of monetary policy.”

The long and short of the PCE report is that it doesn't much change the trend relative to what was already known (ie., are price pressures actually easing, or did the way prices are measured change). June and July were good, but that was already known. August showed that didn't continue, which was already evident after the PPI and CPI numbers came out. Market-based prices are running around 3%, before and after the measurement changes. The 12-month reading looks less unfavorable, but still, no progress towards 2% since April 2025.