UMich Inflation Expectations Crash In June; Democrats Lead Sentiment Rebound

The final print for UMich sentiment’s findings on inflation expectations were unchanged from the flash print with 1Yr outlook at 3.3% – the lowest since March 2021 – and 5-10Y inflation exp eased down to 3.00%…

Source: Bloomberg

However, we do note that these expectations remained elevated relative to the 2.2 – 2.6% range seen in the two years pre-pandemic.

Also good news is that the uncertainty around the inflation outlook has fallen as consumers seem more confident that The Fed has things under control…

The headline sentiment print rose further intra-month to 64.4 from 63.09 flash

Source: Bloomberg

Buying Conditions improved modestly…

Source: Bloomberg

As UMich reports, the year-ahead economic outlook soared 28% over last month, and long-run expectations rose 11% as well.

Democrats are leading the resurgence in confidence…

Overall, this striking upswing reflects a recovery in attitudes generated by the early-month resolution of the debt ceiling crisis, along with more positive feelings over softening inflation.