U.S. inflation expectations declined to their lowest level since January 2016 in May, according to the Federal Reserve Bank of New York's survey of consumer expectations.
Median three-year ahead inflation expectations declined to 2.5% in May from 2.9% in April. Median one-year ahead inflation expectations decreased to 2.6% in the month from 2.8% in the previous month.
The New York Fed said expectations declined for all income groups, with the largest decline for lower-income households.
The decline comes as the Federal Reserve is expected to raise interest rates twice more this year, starting with the meeting later this week.