The household finance outlook has reached its highest point since February 2020, according to a New York Fed survey following the Trump win.

• Since the Covid pandemic, the highest percentage of households expecting their financial situations to improve in a year is 37.6%, according to a New York Fed survey.
• The government debt growth expectation for the median was 6.2%, a decrease of 2.3 percentage points from October, and the lowest since February 2020.

Following Donald Trump's presidential election victory in November, optimism about household finances reached a multiyear high, according to a New York Federal Reserve survey released Monday.

The percentage of households anticipating an improvement in their financial situations increased by 8 percentage points to 37.6% in the central bank's survey of 1,300 heads of households, which is the highest reading since February 2020, just before the Covid-19 pandemic hit.

The percentage of people who anticipate their financial condition to deteriorate has decreased to 20.7%, a 2 percentage point drop from the previous month and the lowest since May 2021, coinciding with an increase in optimism.

Trump's victory in November will result in his return to the White House for a second non-consecutive term. The Republican has pledged to implement policies that include lower taxes and deregulation to stimulate economic growth.

Despite the macro economy's steady growth until 2024, consumers are still facing price hikes that led to a significant increase in the consumer price index inflation rate of over 20% under President Joe Biden.

Despite the increase in sentiment, consumers remain cautious about inflation, according to the New York Fed Survey.

Inflation expectations for the one-, three- and five-year horizons have increased by 0.1 percentage point, reaching 3%, 2.6%, and 2.9%, respectively. Despite the Fed's target of 2% inflation, it is expected to lower its benchmark interest rate by a quarter percentage point when it meets next week.

Despite Trump's silence on attacking the government's debt and deficit, the outlook improved, with the median expectation for government debt growth decreasing to 6.2% from October, a 2.3 percentage point drop, and the lowest level since February 2020.