Although it’s only as good as this week’s CPI report and, after that, the first read on January inflation expectations from the University of Michigan poll, markets were handed another incremental nod to peak price growth on Monday, when the New York Fed consumer survey tipped yet another decline.

Median year-ahead inflation expectations dropped to 5% for December, the lowest since July 2021. Three-year-ahead expectations were unchanged at 3% which was acceptable, all things considered.

Technically, the unrounded prints were a tick below 5% and 3%. Five-year expectations moved marginally higher, but at 2.4% are effectively in line with the Fed’s goals.

By income bucket, year-ahead expectations have all converged on 5%, while three-year expectations are likewise aligned at 3% irrespective of annual pay. At the five-year point, those making $100,000 or more see inflation running at 2.8% over the longer-term, notably higher than than those making less.

By educational attainment, those with a bachelor’s degree or higher now harbor the most benign outlook for the year ahead, at 4.7%. At the three-year point, those without a college education had the lowest expectations for price growth at 2.5% last month.

Spending expectations receded fairly sharply in December, and although the demographic series can be very noisy, it’s worth noting that expectations among those with “some college” notched the largest decline ever.

Expectations for those with a high school degree or less rose in December to the third-highest ever, while those for the most-educated cohort ticked slightly lower. By income bucket, declines were essentially uniform, but not especially pronounced.

Spending expectations for the least-educated and least-well-off Americans are now very detached from expectations among better-educated, richer citizens. Presumably, that’s a manifestation of the “K-shaped” inflation dynamic.

Income growth expectations moved to a new series high overall, and also for the least-educated and for the “some college” cohorts. The breakdown by income bucket showed the poorest and richest Americans expected record pay growth, while middle-class expectations faded to a four-month low.

The outlook for home prices improved marginally, but price growth expectations remained near record lows after collapsing from all-time highs seen during the pandemic boom.

All in all, the New York Fed survey was market-friendly. But, again, it only matters if it’s corroborated by CPI and University of Michigan expectations.