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US DATA: Tariff Impact Clear as Year-Ahead Inflation Expectations Surge

US DATA
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UMich sentiment posting a notable uptick in one-year inflation expectations here - up to 4.3% from 3.3% prior. Reasonable to believe that it's the tariff threats showing up in expectations as the survey period covered January 21st and concluded on February 4th - just three days ago. Tariffs also mentioned explicitly in the slowdown in buying conditions for durables: "in part due to the perception that it may be too late to avoid the negative impact of tariff policy".

  • UMich themselves note on that lurch higher in inf. Expectations: "This is only the fifth time in 14 years we have seen such a large one-month rise (1ppt or more) in year-ahead inflation expectations".
  • Souring sentiment evident across the political landscape also - Republican gauge of current conditions dropped to 51.0 (vs. 63.9 in Feb'24), while the Democrat expectations component dropped to 41.6 - the lowest on records going back to 2006.
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UMich sentiment posting a notable uptick in one-year inflation expectations here - up to 4.3% from 3.3% prior. Reasonable to believe that it's the tariff threats showing up in expectations as the survey period covered January 21st and concluded on February 4th - just three days ago. Tariffs also mentioned explicitly in the slowdown in buying conditions for durables: "in part due to the perception that it may be too late to avoid the negative impact of tariff policy".

  • UMich themselves note on that lurch higher in inf. Expectations: "This is only the fifth time in 14 years we have seen such a large one-month rise (1ppt or more) in year-ahead inflation expectations".
  • Souring sentiment evident across the political landscape also - Republican gauge of current conditions dropped to 51.0 (vs. 63.9 in Feb'24), while the Democrat expectations component dropped to 41.6 - the lowest on records going back to 2006.