Gas-price fears lift US inflation expectations most for lower-income households
A San Francisco Fed letter finds a 10 point upward revision in expected gasoline price growth went with a 0.38 point rise in one-year inflation expectations for households under 50,000 dollars a year. Between 50,000 and 100,000 dollars that move is 0.24 points, above 100,000 dollars 0.12 points. Downward revisions bring no matching decline. US pump prices stayed above 4 dollars a gallon every day of August. Inflation runs above 3 per cent against the Federal Reserve's 2 per cent target.
Economics & Markets··Night
A 10-point gasoline revision is 0.38 points for lower-income households
Taerin Kim and Yeji Sung write that a 10 percentage point upward revision in expected gasoline-price growth moves together with a 0.38 percentage point rise in one-year inflation expectations for households earning less than 50,000 dollars a year. Between 50,000 and 100,000 dollars the same estimate is 0.24 percentage points, and above 100,000 dollars it is 0.12 percentage points. By education the upward revision moves with 0.32 percentage points for high school graduates, 0.26 points for those with some college and 0.21 points for college graduates. Downward revisions bring no matching decline in any income group.[1]
Pump prices stayed above 4 dollars every day of August
The national average pump price in the United States stayed above 4 dollars a gallon every day of August, the most expensive August in the country's history according to AAA. Inflation is running above 3 per cent against the Federal Reserve's 2 per cent target. The war has curtailed traffic through the Strait of Hormuz, which carries about 20 per cent of the world's oil shipments, and Brent swung between 72 and 102 dollars over the past month. Energy shares gained, with Exxon Mobil up 1.7 per cent and Chevron up 1.5 per cent.[2]
Gasoline averaged 4.65 dollars in May as Brent jumped 2.8 per cent on Monday
In May 2026 average retail gasoline reached 4.65 dollars a gallon, up from 3.06 dollars in February. On Monday Brent crude rose 2.8 per cent to 90.59 dollars a barrel after US forces struck Iranian rocket launchers on the Strait of Hormuz, the first military action in a month. The yield on the 10-year US Treasury rose to 4.75 per cent.[1], [2]
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