UMich Sentiment Disappoints As Inflation Dampens Buying Enthusiasm

The preliminary UMichigan consumer sentiment survey misses expectations in October, at 71.4 (vs 73.1 expected, 72.8 prior), retracing most of the modest September uptick from August's 10-year low. The disappointment came amid the highest 1Yr inflation expectations (4.8%, vs 4.7% expected) since 2008.

• "When asked to describe in their own words why conditions were unfavorable, net price increases were cited more frequently than any time since inflation peaked at over 10% in 1978-80," as BBG quoted survey director Richard Curtin, citing a statement.
• That said, 5Yr inflation expectations receded to 2.8% vs 3.0% prior.
• A weak report that stands in stark contrast to the retail sales beat earlier - and will raise questions about inflation's impact on consumer health.
• Treasuries ticked up modestly with the USD a touch lower, but not nearly as big an impact as the well-below-consensus August survey.