A Reminder That UMich Inflation Expectations Are Completely Useless

By Mark Cudmore, Bloomberg Markets Live reporter and strategist

The inflation expectations reading from the University of Michigan is again being cited as a relevant input. It’s not. Anyone who is allowed to touch any of the real buttons in a trading room should ignore it.

It’s completely useless, not just as a guide to levels, but even directionally. No amount of data-mining can validate any useful signal from the reading since the inflation regime changed several years ago.

Let’s blame quiet markets and the focus on Thanksgiving to give offenders a pass this time. If forced to write on markets today, there’s going to be some straw-clutching.

Here’s an updated overlay chart of US CPI versus where the University of Michigan survey said they would be one year prior; there is zero informational value from that data: