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U.S. consumers in June lifted their inflation expectations for the first time in three months, New York Fed data showed on Monday, reducing pressure on central bankers to cut rates significantly to support economic momentum.

Federal Reserve policymakers are debating whether to cut rates given uncertainty over a U.S. trade war and tepid inflation, with markets expecting stimulus from the central bank by its July 30-31 meeting.

The U.S. economy has been falling short of the Fed’s 2 per cent-a-year inflation goal. Policymakers are worried about the potential for slower spending and tamer growth.

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The Federal Reserve Bank of New York’s survey of consumer expectations, which the Fed considers along with other data on U.S. price pressures, showed consumers’ one-year inflation outlook rising 0.2 percentage points to 2.7 per cent. Three-year inflation expectations also ticked up to 2.7 per cent. In May, the gauges had hit their lowest levels since at least 2017.

Consumers also showed more confidence about their personal financial situation, reporting a lower likelihood that they would lose their jobs, higher expectations of pay raises and a smaller chance of missing a debt payment. Yet nearly 39 per cent see U.S. stock prices higher in a year’s time, the lowest level since October 2016.

U.S. job growth rebounded strongly in June, Labor Department data showed on Friday, but wage gains remained moderate and there was still mounting evidence the economy has been losing momentum.

The New York Fed survey is done by a third party that taps a rotating panel of about 1,300 household heads.

A separate survey last month by the University of Michigan showed consumers’ one-year and five-year inflation outlook had declined over the month prior.

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