Americans are optimistic about inflation being lower in the coming months; however, their future outlooks — for price hikes as well as their own finances — are a little more clouded.

Consumers' near-term inflation expectations fell in May to their lowest level in two years, according to new survey data released Monday by the Federal Reserve Bank of New York.

While survey respondents also reported more optimism about the strong labor market and their households' abilities to bring in and spend money, consumers were less optimistic about their ability to get credit and their overall financial health, the survey showed. Additionally, inflation expectations for three and five years from now increased from the month before, according to the New York Fed's monthly Survey of Consumer Expectations, which measures expectations and behaviors over time for a rotating panel of 1,300 individuals.

Since peaking at a 40-year high last June, inflation has cooled considerably but still remains above the Federal Reserve's target of 2%. Since March 2022, the Fed has increased its benchmark interest rate 10 consecutive times.

The early half of this week will provide additional clarity on inflation's trajectory: The Bureau of Labor Statistics on Tuesday and Wednesday is set to release the Consumer Price Index and Producer Price Index, respectively. Additionally, the Fed on Wednesday will announce whether it plans to pause its rate-hiking streak or enact another increase.

Amid the Fed's historic stretch of ratcheting up interest rates (enacted as a means of trying to bring down inflation by cooling demand), more interest rate-sensitive areas of the economy have slowed. However, the labor market continues to be a sense of strength for the economy as areas hard-hit by the pandemic continue to hire and respond to consumers' increased appetite to spend on services and experiences.

Monday's survey showed that while respondents aren't expecting an increase in the unemployment rate one year from now and that they are feeling optimistic about their job prospects, they also expect wage gains to be lower this time next year.

Fed Chair Jerome Powell has expressed concern about the possibility of sustained wage gains putting upward pressure on inflation.

This story is developing and will be updated.