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Surprise, Large Declines In U.Mich Inflation Expectations

US DATA
  • U.Mich consumer sentiment was much stronger than expected in the preliminary December report, at 66.4 (cons 57.0) after 56.8.
  • 1Y inflation expectations slumped to 3.1% (cons 4.3%), its lowest since Mar 2021 having touched 3.2% in September before jumping to 4.5% in Oct.
  • 5-10Y inflation expectations also fell much more than expected to 2.8% (cons 3.1) after the surprise increase to 3.2% pushed it to the highest since 2011. Instead, it now reads the lowest since Sep 2022 and before that Jul’21.

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