As of April, consumers were more likely to expect future expansions in many government assistance programs than they were a year ago, although expectations about possible increases in taxes and fees were mixed, the Federal Reserve Bank of New York reported in its Public Policy Survey, part of the larger Survey of Consumer Expectations.
The mean probabilities that consumers assigned to future expansions in federal student aid, Pell grants and federal student debt forgiveness all grew in April, with respondents placing the probability of expansion between roughly 31% to 40%, depending on the program. The average perceived likelihood of an increase in federal welfare and unemployment benefits also grew, with respondents placing the probability at 36% and 30.3%, respectively. Consumers were less certain about housing assistance or affordable housing programs, with the average perceived likelihood of an increase dropping from 36.6% to 34.6%.
In terms of taxes and fees, consumers were less likely this year to expect future increases in the capital gains tax rate and income taxes for the highest income bracket, but they were more likely to expect increases in the average income tax rate and payroll taxes. At the same time, consumers placed the average likelihood of an increase in the mortgage interest deduction at 24.8%, a series high.