Fed Survey: Consumers’ Access to Credit Was at Toughest Level in Nearly a Decade Last Month

Earlier this month, the Federal Reserve Bank of New York’s Center for Microeconomic Data released the Survey of Consumer Expectations for March 2023. The survey found that access to credit was at its toughest level in nearly a decade as consumers battled high inflation, and inflation expectations rose at short-term and medium-term horizons, but fell at the longer-term horizon.

The survey found that more households said credit is harder to get than a year ago, rising to the highest level seen since the start of the survey in 2014. According to Reuters, the report said that “respondents were more pessimistic about future credit availability as well, with the share of households expecting it will be harder to obtain credit a year from now also rising.”

Households expect that inflation next year would be 4.7 percent, three years from now would be 2.8 percent, and five years out would be 2.5 percent. Though these are all higher near-term inflation expectations than the bank surveyed in February, respondents predict lower food, gasoline, and rent costs.

Central bankers typically believe that inflation follows public expectations, so the rise in inflation expectations could present a challenge for the Fed’s goals to lower inflation. The Fed has campaigned to lower inflation back to 2 percent throughout the last year, and any signs that inflation may be decreasing could end the rate rise cycle.

Although households have reported difficulty in getting loans, survey respondents said that both their current and future financial situations improved in March, and reported expectations of higher spending and household incomes.