02:16 PM EDT, 06/09/2025 (MT Newswires) -- Inflation expectations eased in May, a survey by the Federal Reserve Bank of New York showed Monday, ahead of consumer price index data due later this week.

Median year-ahead inflation was seen at 3.2% last month, down by 0.4 percentage point from April's outlook, according to the survey.

Three years out, the expected metric fell 0.2 percentage point at 3%, while the five-year outlook moved down by 0.1 percentage point to 2.6%.

Markets await the CPI report for May, which is set to be released on Wednesday. The Bloomberg-polled consensus indicates flat monthly growth at 0.2%, with the annual metric rising to 2.5% from 2.3%.

"We think May is the starting point of a sequence of increasingly strong core inflation prints," Morgan Stanley said in a note emailed Monday. "We forecast the tariff push

will peak in (the third quarter) and start to fade in (the fourth quarter)."

The New York Fed survey results come days after the Federal Reserve said that US economic activity "declined slightly" since late April as tariffs put upward pressure on prices.

Two Fed policymakers last week separately expressed concerns over the impact of tariffs on prices. Fed Governor Lisa Cook on Tuesday warned that tariffs could hinder progress on inflation, while Governor Adriana Kugler said Thursday that tariffs will likely drive prices higher through 2025 and could lead to job losses.

The New York Fed survey showed median home price growth expectations declined by 0.3 percentage point to 3% in May.

Year-ahead expectations eased for gas, medical care, education, and rent. However, expectation for food rose by 0.4 percentage point to 5.5%, the highest since October 2023, according to the Fed branch.

Last week, both Cook and Kugler voiced support for keeping interest rates steady even as President Donald Trump once again called for lower rates after data on Friday showed that the world's biggest economy added more jobs than expected last month.

The Federal Open Market Committee is scheduled to review monetary policy at its next meeting on June 17 and 18.