(Reuters). Despite Americans’ lower inflation expectations in April, their perception of inflation over the medium-term rose. Household spending expectations also climbed to a record height according to a Federal Reserve Bank of New York poll published Monday.

The median expectations of where inflation would be within one year dropped to 6.3% by 0.3 percentage points, but they rose to 3.9% over the three-year outlook, an increase of 0.2 percentage points.

The 40-year high inflation in America is a serious problem. There are no signs that it will ease soon. Russia’s invasion and occupation of Ukraine have driven up energy and food prices. Meanwhile, COVID lockdowns in China keep other goods supply chains clogged.

There are some signs that it may have peaked. The Labor Department will release its closely-watched Consumer Price Index for April on Wednesday. According to a Reuters poll, both core and headline prices have dropped year-over-year for the first time since August. However, core inflation on a monthly basis may rise to 0.4% instead of 0.3%.

Last week the central bank raised interest rates by half a percentage point, the biggest hike in 22 years, and Fed Chair Jerome Powell signaled policymakers stand ready to approve half-percentage-point rate hikes at upcoming policy meetings in June and July as the Fed steps up its fight to lower the rate of price increases.

While tightening monetary policies can lower inflation and dampen demand, the New York Fed survey shows that households are not planning to reduce their spending. The median household spending expectations increased to 8.0%. This is a record-breaking figure for this series.

Consumers are optimistic about the near-term gains despite the recent decline in U.S. stocks. By 0.6 percentage points, the mean perception of stock market prices rising 12 months in the future has increased to 37.9%.

New York Fed Survey suggests that consumers are expecting short-term relief for some areas in the coming year. The survey shows that inflation expectations for gas prices dropped slightly by 4.4 percentage points, to 5.2%. Food and medical costs have declined by 0.2 percent each to 9.4%. The median home price expectation was unchanged at 6.0%, while the rent increase is expected to be record-breaking.

An internet-based panel of approximately 1,300 households participates in the survey.