This has gone too far: the Americans have had enough

The central bank published a survey according to which consumers' inflationary expectations fell - to the lowest level since 2013.

As AP writes, some of the largest American companies, such as Amazon or Disney, report that consumers are increasingly looking for cheaper alternatives for goods and services; to look for discounts or avoid products they consider too expensive, without cutting consumption to the point of causing a recession.

As pointed out by some economists, they appear to be reverting to their pre-pandemic habits when most companies did not raise prices too lightly for fear of jeopardizing their business.

"Although inflation has been reduced, prices are still high, and I think consumers have reached a point where they simply do not accept it anymore. And that is exactly what is being asked for. The solution to high prices is to raise the price of them high," said the president of the Federal Reserve branch last week, i.e., the American Central Bank in Richmond, Tom Barkin.

More sensitive consumers to price hikes may explain why US inflation has steadily declined toward the Federal Reserve's Consumer set to a two percent annual target rate. This will end a period of painfully high prices that have strained the budgets of many American families and made their outlook on the economy bleak.

Due to inflation, many Americans were dissatisfied with the way the current US administration led by President Joseph Biden and Vice President Kamala Harris is managing the economy.

The inflation will also be important in the upcoming presidential elections, where Kamala Harris as the candidate of the Democratic Party and Donald Trump as the candidate of the Republican Party will compete.

However, the reluctance of consumers to pay more has forced companies to raise prices more slowly or even to reduce them, and the result is a cooling of inflationary pressures.

The New York branch of the Federal Reserve said that Americans' expectations of how much more money they will have to spend over the next 12 months have now been lowered and that their inflation expectations have also been lowered.

According to a survey conducted by the New York branch of the Fed, consumers expect to spend 4.9 percent more money in the next 12 months than before, which is the lowest expectation since April 2021 when inflation started to rise.

Likewise, they expect inflation to be around 2.3 percent on average over the next three years, the lowest level of inflationary expectations since 2013 when such surveys were conducted.