Americans’ inflation expectations rose last month, according to the new vintage of the New York Fed’s consumer survey, released on Monday.

That’s not the best news for a Fed that wants an excuse to cut rates. Remember: Inflation has a psychological component. Expectations can become self-fulfilling. That’s why policymakers are obsessive about ensuring consumers’ outlook for price growth stays “well anchored.”

Although expectations at the one-year horizon ticked up only slightly (thereby remaining near early-2021 levels), consumers’ outlook at the key three-year point moved up meaningfully to the highest since November.

The 0.4ppt month-to-month increase counted as the third largest in the (admittedly truncated) history of the series.

Of course, the jump came after consecutive large declines in December and January, so the net change over the last three months is still a pronounced drop in the price growth outlook over the medium-term. But February’s increase suggests media coverage of January’s inflation data might’ve impacted consumer psychology. Notably, longer run expectations jumped to 2.9% from 2.5%.

Both increases — on the three-year and five-year points — were most pronounced for the undereducated. The series is far too volatile to be worth charting, but for whatever it’s worth, the MoM point increase in three-year ahead inflation expectations for those with a high school degree or less was 1.26ppt, the third-largest ever. But, at the one-year horizon, the same cohort saw price growth running 3.08%, the lowest projected pace for that demographic since November of 2020.

Meanwhile, expectations for credit conditions deteriorated, erasing part of the marked improvement observed in January.

A larger share of respondents reported tighter conditions versus a year ago and a higher share said they expect credit access to be more constrained a year from now. As the chart shows, the uptick in the combined share was small.

Finally, labor market expectations suggested little in the way of deterioration. The mean probability that the jobless rate will be higher 12 months from now dropped to a two-year low at 36.1%, even as the perceived odds of losing one’s job rose to the highest since April of 2021 (roughly in line with the pre-pandemic average).

Note that the mean probability of losing a job for those with a high school degree or less was back near a series high at 18.3%. That cohort also has the lowest perceived probability of finding a new job within three months in the event of a job loss today.

Some readers will recall the chart above. For all the talk about how “useless” college degrees are, it’s getting harder and harder to find a good job without one.

All in all, Monday’s NY Fed poll skewed hawkish for the Fed given the unwelcome increase in medium- and longer-term inflation expectations. The irony’s always the same, though: Policymakers care more about the University of Michigan expectations series than the Fed’s own poll.

The preliminary read on Michigan sentiment for March, accompanied by inflation expectations, is due Friday.