Americans’ inflation expectations are changing: US consumers’ 1-year inflation expectations fell to 4.4% in July, the lowest since February 2025. Over the last 2 months, expectations have declined 2.2 percentage points, marking one of the largest 2-month drops in history. This metric now sits below its March 2022 peak of 5.4% Furthermore, 5-year inflation expectations have fallen 0.8 percentage points over the last 3 months, to 3.6%, the lowest since March. However, long-term expectations remain above the average levels recorded over the last 30 years. Containing inflation must remain a top economic priority.(The Kobeissi Letter)