Consumer sentiment data from the University of Michigan • Prior was 59.7. • Current conditions 68.6 vs 60.0 expected (prior 59.4). • Expectations 62.0 vs 59.5 expected (prior was 59.9). • One-year inflation expectations 4.0% vs 4.4% prior. • 5-year inflation expectations 3.0% vs 2.9% prior. This survey is nothing more than a barometer of political sentiment and gasoline prices. That said, the Fed watches the inflation number closely and it was a contribution to the sudden switch to more-aggressive hiking in June (which is funny because it was later revised down). The one-year number will certainly be welcome while ... (full story)

Once again, the most crucial aspect of the UMich sentiment survey is respondents' forecasts for inflation. After yesterday's 0.1% MoM decline in CPI, hope remains high that we are past peak inflation and this morning's UMich data seemingly confirms that as 1-year inflation expectations plunged to 4.0% (vs 4.3% exp), even though medium-term expectations rose modestly (to 3.0% from 2.9%). That is the lowest 1-year outlook since April 2021. But once again, we remind readers that UMich itself admits the uncertainty around this forecast is extremely high. Back to the headline sentiment signals, UMich was expected to show ... (full story)