Consumers think prices are about to climb faster over the next year, but also think that pressure won't last very long. That gap is what the New York Fed picked up in its April Survey of Consumer Expectations, released this morning.
The split matters because both numbers feed straight into how the Fed thinks about cutting rates.
The one-year inflation read rose 0.2 points to 3.6%, the second straight monthly bump and the highest short-term reading in over a year.
Look further out and the picture flips, with the three-year and five-year reads both holding flat in a tight range that's lasted months. That's the same split the bond market has been pricing in.
Gas was the big mover under the hood, with the expected change in gas prices over the next year falling 4.3 points to 5.1% after a wild March spike tied to the Iran war. Rent expectations also eased, dropping more than a full point to 6.0%.
Home price growth expectations slipped to 3.0%, while expected food and college costs each ticked lower as well. The only stat moving sharply higher on the price side was government debt growth expectations, which jumped to 10.0% - the highest reading since June 2023.
The bigger story may be on the labor side. The average chance the U.S. unemployment rate will be higher a year from now climbed to 43.9%, its highest reading since April 2025.
The chance of losing your own job in the next 12 months also rose, hitting 14.6%. The odds of finding a new one if you did lose your job stayed weak at 46.0%, below the 12-month trend.
Income growth expectations rose to 2.7%, slightly above the recent average. Households also said they plan to spend more, with one-year spending growth expectations hitting 5.4% - the highest level since the summer of 2023.
Credit access also got worse, with more households saying it's harder to borrow now than a year ago and more saying it'll get harder still. The one bright spot was that the chance of missing a minimum debt payment over the next three months actually fell to 11.4%, the lowest reading in over two years.
In English: consumers expect to pay more, plan to spend more, and are getting nervous about whether they'll still have a job to cover it - while finding it harder to borrow at the same time. That mix tends to show up right before a Fed pivot in either direction.
Long-term expectations holding firm gives Chair Jerome Powell cover to keep rates steady, since a short-term jump tied to oil and gas doesn't, by itself, change the path of policy.
But this isn't the only inflation gauge ticking up, and the University of Michigan survey has been running hot for months. If next week's CPI report confirms what consumers are feeling, the case for rate cuts gets thinner.
For now, investors are stuck reading the same two signals the Fed is reading.