US Consumer Inflation Expectations Ease in July
Median 12-month inflation expectations fell to about 4.5% in July, while average expectations dropped to 5.5%, although most consumers still expect interest rates to rise.
The Kobeissi Letter reported that US consumers’ near-term inflation expectations have eased. Median 12-month inflation expectations fell to roughly 4.5% in July, near the lowest level since Q1 2025. That follows a brief spike to about 5.2% in March, the highest since August 2025.
Average inflation expectations declined to roughly 5.5%, down from 6.2% in March. Both measures are now about 1.5 percentage points below their peaks posted in April 2025, following the “Liberation Day” tariffs.
Despite the improvement, 61.3% of consumers still expect interest rates to rise over the next 12 months, unchanged from June. The battle against inflation continues.
Source: The Kobeissi Letter