Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today
Already have an account? log in
Fed Gets Disastrous Sentiment Report As Inflation Expectations Jump
In a decidedly unwelcome development reminiscent of a fateful Friday in June of 2022, University of
U. Mich inflation expectations tend to move directionally with CPI YOY. When CPI is very high [low], expectations tend to be higher [lower] than CPI. Basically, people extrapolate the present to the future.
https://fred.stlouisfed.org/graph/fredgraph.png?g=13sG6
If inflation gets “stuck” around 5.0%, expectations are likely to go higher from 3.2%.
The rate cuts are right around the corner crowd continue to be wrong in their prognosis. But the market appears to still be listening anyway.