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Consumers weren't bracing for a worsening inflation flare-up in May, a relief that higher prices aren't becoming embedded in household expectations.
Driving the news: The New York Fed's Survey of Consumer Expectations showed year-ahead inflation expectations fell a tick, to 3.5% in May. Three-year expectations held at 3.1%, while five-year expectations remained at 3%.
Why it matters: Households are not building permanently higher inflation into their outlook, even with prices for food, rent and medical care still expected to rise sharply.
