May US consumer sentiment data

  • Weakest since Feb
  • Prior was 88.3
  • Current conditions 90.8 vs 99.8 expected
  • Prior current conditions 97.2 prior
  • Expectations 77.6 vs 84.5 expected
  • Prior expectations 82.7
  • 1-year inflation 4.6% vs 3.5% expected (highest since 2008)
  • 5-10 year inflation 3.1% vs 2.7% Prior

This is a poor reading and a big surprise. The jump in inflation expectations is something that I anticipated and it’s meaningful. The Fed has repeatedly highlighted the importance of inflation expectations and that rise will trouble the Fed. Don’t look at the absolute number, it’s the change that matters. Given all the inflation talk, I don’t think that’s the peak.

One-year inflation expectations:

1 year inflation expectations

5 to 10 year inflation expectations:

5-10 year inflation expecatations

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