A New York Federal Reserve survey shows that consumers are very concerned about the state of inflation in the country, with many of them expecting inflation to rise rather than fall in the coming year.

That survey showed respondents expecting inflation to rise by half a percentage point in the next year, despite aggressive efforts by the U.S. Federal Reserve to lower it. Via CNBC:

Respondents expect prices to rise by half a percentage point in the year ahead, equating to a 4.7% annual gain, the central bank branch’s monthly Survey of Consumer Expectations for March showed.

That’s the first time the near-term outlook increased since October and runs counter to the narrative from Fed officials that they expect inflation to subside as a series of interest rate increases take hold. In their most recent economic projections, policymakers said they anticipate inflation including food and energy prices to decline to 2.5% in 2024.

The current one-year outlook is down from 6.6% from the same time in 2022, but is running well ahead of the Fed’s 2% inflation goal. Expectations on a three- and five-year horizon were little changed at 2.8% and 2.5%.

Consumers expect gas prices to rise by 4.6% in the year ahead, slightly less than the February outlook, and they see food prices up 5.9%, which was a decline of 1.4 percentage points from last month’s survey.

Another concern worrying consumers is access to credit. According to the NY Fed survey, respondents are also far more pessimistic about being able to get credit, with 58.2 percent saying it is much harder or somewhat harder to get credit, which is the highest ever in the survey’s history, dating back to 2013.

10.9 percent of respondents now say they expect to miss a minimum debt payment in 2023.

The survey shows that, despite signs inflation is cooling, the general public is deeply concerned with prices and their impact on families in the country. Economic data for U.S. households shows that more families are struggling at they take up second and third jobs.

Gas prices and food prices are some of the leading causes of concern for American consumers. The national average for gas prices is up 13 cents from a month ago ($3.60 per gallon now vs. $3.47 then).

While the U.S. Fed considers its continued efforts to hike interest rates and concerns about a recession continue to rise, economic concerns from Americans paint a bleak picture about consumer morale.

What’s Next For Inflation?

The next inflation report will be released on Tuesday, April 12. As of right now, economists are expecting numbers in line with what they’ve seen for the past six months. If that is the case, then it will likely give the Fed reason to continue with its rate hikes.

The last rate hike came amid fears of a financial crisis as three tech-aligned banks faced a sudden collapse. However, despite a short run on regional banks, the crisis appeared largely averted and the Fed hiked raise by 25 basis points in March. With the core consumer price index expected to be up 5.6 percent from a year ago, inflation will still be far higher than the 2 percent benchmark the Fed has set for inflation, meaning that hikes are likely to continue.