There is a great fear about inflation in the US. And why it remains so low DESPITE the trillions in stimulus spending by the Biden Administration.
According to a survey by The New York Fed, consumers are expected to spend less than 25% of the latest stimulus checks. The checks are expected to be used to pay down debt and add to savings.
(Bloomberg) — U.S. consumers are socking away 42 cents of every dollar received from the third round of pandemic stimulus checks sent out in March, according to a new poll by the Federal Reserve Bank of New York.
Less than 25% of the funds are being spent and the remainder is being used to pay down debts, according to the New York Fed survey data, published Wednesday.
Eligible adults and children began receiving the $1,400 stimulus checks last month under the American Rescue Plan Act. Households surveyed received $3,162 on average, the New York Fed said. Respondents reported 13% of the funds were expected to be spent on essential items on average, and 8% on nonessential items.
Inflation is only 1.4% year-over-year.
The New York Fed’s Inflation Expectations Median 1 year ahead rate is 3.09%.