By Michael S. Derby

NEW YORK (Reuters) – Americans’ outlook on inflation remained steady last month as households improved their perceptions of personal finances and credit access, according to a report from the New York Federal Reserve.

As of June, the expected inflation one year from now was 3%, down from 3.2% in May, with three- and five-year expectations stable at 3% and 2.6%, respectively, based on the latest New York Fed Survey of Consumer Expectations.

The survey revealed that respondents had significantly improved their views on personal financial situations compared to last year, noting easier access to credit. Expectations for financial circumstances one year ahead were also upgraded.

June’s survey found mixed expectations for future earnings and income while the outlook for employment showed improvement.

Despite a steady outlook for inflation, households anticipated increases in costs for gasoline, medical care, college, and rent, while food cost expectations remained unchanged since May.

Near-term inflation expectations have fluctuated this year, influenced by President Trump’s trade policies, which involve tariffs on imports, potentially raising inflation and affecting growth and hiring.

As concerns about inflation eased with the administration’s softer stance on tariffs, long-term inflation expectations have generally remained stable—a positive sign for Federal Reserve officials, who believe this indicates confidence in managing inflation long-term.

Fed officials expect higher inflation this year from tariffs but anticipate this pressure to lessen next year. They indicated potential rate cuts at their last policy meeting, but strong job data for June has shifted focus away from immediate cuts. Fed Chair Jerome Powell emphasized their commitment to maintaining long-term inflation expectations and preventing transient price increases from escalating into sustained inflation.