The risk of consumer prices rising was diminished Monday after the New York Federal Reserve Bank said inflation expectations declined in April.

The New York Fed reported that the public’s expectations of future price rises declined to the lowest level since 2017. The public expects inflation to rise by 2.6 percent a year from now, down from 2.8 percent in March. Three years from now, expectations are for 2.7 percent, down from 2.9 percent.

The New York Fed’s April Survey of Consumer Expectations was taken before the latest round of tariff hikes was announced. But falling inflation expectations indicate that the risk fo the economy of higher prices from the hike in import levies has retreated.

The Fed said that the public had become more optimistic about their households’ overall financial situation and about the labor market, with expectations about the U.S. unemployment rate, finding a job, and losing one’s job all improving. Median expected household income growth also ticked up, from 2.8% in March to 2.9% in April.

The move in expectations could put additional pressure on the Fed to cut its interest rate target or otherwise signal a looser monetary policy. The personal-consumption expenditure price index, which Fed looks to as the best measure of inflation, recently fell to just 1.5 percent, well below the 2 percent targeted by monetary policymakers.

Inflation expectations are important because Fed officials think that the public’s view of future price and income changes is an influential driver of actual inflation. The forecast influences the outcome.