New York Fed survey: U.S. inflation expectations rise to 8-year high

The New York Fed said on Monday that survey respondents expected inflation to be 3.6% over the next three years, up from 3.1% in April. This is the highest level since August 2013, and short-term expectations are at a record level.

The U.S. consumer price index (CPI) rose 5% through this May, the largest annual gain since 2008. But other widely watched inflation-related measures have begun cool down in recent weeks. Preliminary results from the University of Michigan's monthly survey of U.S. consumers showed that 5-to-10-year inflation expectations may have fallen to 2.8% this month after rising to 3% in May; 10-year inflation was close to 2.35% on Monday, lower than the high of 2.56% in the mid of May

More aggressive officials point that the U.S. could face higher inflation risk. Moderates, on the other hand, may argue that the modest increase in medium-term expectations relative to short-term expectations proves that the current price increases is related to the reopening of the economy and will be temporary.

Fed officials are likely to discuss the data at this week's Federal Open Market Committee meeting, where they will discuss the next steps of monetary policy. Policymakers keep a close eye on indicators of inflation expectations, which they see as key determinants of actual inflation.