The week of June 12 to June 16 is almost certain to bring an interest rate hike from the Federal Reserve’s Federal Open Market Committee. That consensus estimate is for a 0.25% hike, and that is more or less identical to the detailed predictions from last week. The question now is what to make of future rate hikes in 2017 — or even the Fed’s $4.4 trillion or more balance sheet that ultimately needs to be dealt with.

Unfortunately, that 2.0% to 2.5% stated inflation target range has been hard to get back to. It also has proven to be very hard to hold.

Some new data only makes the inflation hawks that much more disappointed. The New York Federal Reserve Bank has released its survey of consumer expectations. Inflation expectations have now declined moderately, and the spending growth outlook remains at a low point. Perhaps the victory here should be is that inflation expectations may stay at or just above the Fed’s inflation target range.

Expectations for home prices continued to edge up, while the outlook of consumers in several other areas showed few signs of optimism. Perceived current and expected future financial situations worsened from the previous month.

On inflation expectations, the New York Fed’s consumer Survey said:

Inflation expectations declined at both horizons—dropping noticeably at the three-year ahead horizon. Median one-year ahead inflation expectations decreased from 2.8% in April to 2.6%. Median three-year ahead inflation expectations dropped from 2.9% in April to 2.5%, their lowest reading since January 2016. For both horizons, the declines were most notable for younger household heads (those less than 40 years old) and those with a high school degree or less. While expectations declined for all income groups, they were largest for lower-income households (below $50,000 household income). Inflation uncertainty at both horizons continues to remain at series low.

Median year-ahead home price change expectations continued their upward trend, reaching 3.5%, up from 3.4% in April and 3.1% in February this year. This was driven by an uptick in expectations for respondents residing in the Midwest.

On labor conditions and wages, the one-year ahead earnings growth expectations decreased from 2.5% in April to 2.2%. This has oscillated between 2.0% and 2.5% since late 2015. The perceived probability of losing one’s job in the next 12 months increased from 13.2% in April to 13.6%. Median expected household income growth was largely unchanged from the previous month, at 2.7%.

More data summaries were shown as follows:

• The average perceived probability of missing a minimum debt payment over the next three months increased from 12.2% in April to 13.1%, but it remains below its 2016 average of 13.3%. The increase was driven by respondents with household income of $50,000 or more, and those ages 60 or less.
• The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now than it is today dropped to 37.2%, down from 39.2% in April and from its series high of 41.8% in March.
• Households’ financial situation — both their perception of their current status compared to a year ago as well as their one-year ahead expectation — deteriorated from the previous month.
• The mean perceived probability that U.S. stock prices will be higher 12 months from now rose from 43.8% in April to 44.0%, and it continues to be considerably higher than the 2016 average of 38.8%.

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