An economic survey by Philadelphia’s Fed shows that leading economic forecasters expect inflation to average 7.1% annual rate, an increase from previous 3.8%. SPY is up +2.21%, DXY is down -0.13%.
- The projected inflation is expected to take the annual Personal Consumption Expenditures higher to 5.7% in the current quarter, compared to the previous 3.1%.
- Other economic indicators worsened in the survey, with the economists expecting the real GDP to expand at an annual rate of 2.3% this quarter, which is 1.9% below the previous forecast. The GDP is expected to rise 2.3% and 2.0% in the next two years, both below previous forecasts.
- The unemployment rate expectation still held at 3.6% for 2022 and 2023, before rising slightly to 3.8% in the next two years.
- The worsening economic conditions came at the back of a decline in consumer sentiment due to high inflation. The University of Michigan survey showed that the gauge of consumer sentiment fell by 9.4% to 59.1 in early May, the lowest since 2011.