Consumer expectations for inflation rose for the second straight month to the highest level since May, the University of Michigan said Friday, citing an October survey.

Persistent price pressures, fueled by the highest U.S. tariffs since the 1930s and a war-induced surge in fuel prices, have dimmed consumer perceptions of affordability and stirred up expectations that inflation will accelerate.

Expectations among consumers for inflation 12 months from now rose to 4.7% this month from 4.6% in September, the University of Michigan said Friday, citing a survey.

The number “substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings,” Joanne Hsu, the university’s surveys of consumers director, said in a statement.

Long-run inflation expectations also rose 0.1 percentage point this month to 3.5% from 3.4% last month, well above the range of 2.8% to 3.2% in 2024, Hsu said.

“Inflation expectations over both time horizons increased for the second straight month to their highest readings since May,” she said.

Fed officials closely track expectations for inflation, believing such sentiments can become self-fulfilling. Surveys by the Conference Board and New York Fed last month also showed that households expect price pressures to increase.

“ I am concerned that the recent acceleration in inflation — after what soon will be five and a half years of it above the FOMC's [2%] target — will lead consumers, investors and price-setting businesses to revise up their expectations for future inflation,” Fed Governor Christopher Waller said in a speech Thursday, referring to the policy-setting Federal Open Market Committee.

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