U.S. President-elect Trump receives the award at the Fox National Patriot Awards at the Tiles Center in Greenville, New York, on December 5, 2024.
Michael M. Santiago | Michael M. SantiagoGetty Images
Optimism about household finances hit a multi-year high after Donald Trump won the presidential election in November, according to a survey released by the New York Federal Reserve Bank on Monday.
A central bank survey of about 1,300 household heads showed that the proportion of households expecting to be in better financial condition in one year jumped to 37.6%, an increase of about 8 percentage points from October. This is the highest reading since February 2020, before the Covid-19 pandemic broke out.
As optimism grew, the proportion expecting financial conditions to worsen fell to 20.7%, down nearly 2 percentage points from a month ago and the lowest level since May 2021.
Trump’s victory on November 5 will return him to the White House for a second non-consecutive term. Republicans have promised a series of lower taxes and deregulation measures to boost economic growth.
Although the macro economy is showing solid growth through 2024, consumers are still hampered by rising prices, with the Consumer Price Index inflation gauge rising more than 20% cumulatively under President Biden.
A New York Fed survey showed consumers remain cautious about the outlook for inflation despite rising sentiment.
Inflation expectations for one, three and five years each increased by 0.1 percentage points to 3%, 2.6% and 2.9% respectively. The Federal Reserve’s inflation target is 2%, but it is still expected to cut the benchmark interest rate by 25 percentage points at next week’s meeting.
The government’s outlook has also improved, although Trump has said little about attacking the government’s debt and deficit burden. The median government debt growth forecast is 6.2%, down 2.3 percentage points from October and the lowest level since February 2020.
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