With apologies for the frequency of expletives this week: Red f-cking alert.

Five- to 10-year inflation expectations on the University of Michigan’s closely-watched measure just stormed higher for a second month, hitting 3.9%. Add as many exclamation marks as you like, because if you know anything about that series, 3.9% is disastrously high.

Recall that last month, the same survey-derived metric unexpectedly rose to 3.5% in the final read. That was a 30-year high on its own. Now, we’re looking at the highest print since 1993.

As the figure shows, the two-month increase, which is to say the increase since Donald Trump’s second inauguration, may as well be a 90-degree angle.

This won’t work. The Fed’s going to hate this with a holy passion. I realize most of you can by now recite the backstory, but I’m going to regale you again, because on the off chance you’re not familiar, you really do need the context.

Contrary to popular belief, it wasn’t (necessarily) the May 2022 CPI release which prompted the Fed to resort to 75bps rate-hike increments. Rather, it was the preliminary June 2022 readout on five- to 10-year Michigan inflation expectations, released an hour and a half after the May CPI report on June 10 of that year. That readout, 3.3%, is what really spooked the Committee, and it was accompanied by the worst headline consumer sentiment print on record. One business day later, on June 13, 2022, Wall Street Journal “Fed whisperer” Nick Timiraos tipped the Committee’s intention to up the ante at the June 2022 FOMC meeting, where Jerome Powell delivered the first of what would ultimately be four straight 75bps rate hikes.

Now here we are almost three years later, and that same series if more than half a percentage point higher than it was when the Fed embarked on what can very fairly be described as “panic hikes.” In no uncertain terms: A Fed looking at a 4-handle (damn near) on five- to 10-year Michigan inflation expectations would be reluctant to cut rates even if they hadn’t delivered any cuts already. And this Fed’s already cut by 100bps.

Year-ahead inflation expectations (i.e., the 12-month series in the Michigan release) jumped to almost 5%, the highest since October of 2022.

If you’re wondering whether this manifested in a terrible read on headline consumer sentiment, the answer’s “yes.” Or, more aptly, “YES!” 57.9 missed consensus by a country mile. In fact, not a single economist predicted a readout that poor.

As the figure shows, this situation’s escalating rapidly, and we’re now perilously close to the record-lows hit in mid-2022, when inflation was running rampant.

There’s no mystery here: It’s Trump. The problem’s Trump. “Many consumers cited the high level of uncertainty around policy and other economic factors,” survey director Joanne Hsu said, adding that “frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences.”

The emphasis on “regardless” in the quote wasn’t in the original. I emphasized that word to drive home a point: Say what you want, vote how you will, but this ain’t workin’, folks. The Michigan release obviously admitted of the usual partisan split, but the overarching message isn’t auspicious.

We’re not even two months into “Trump 2.0” and we’ve got a stock correction, consumer sentiment in free fall and the highest household inflation expectations since Beavis and Butt-Head was the hottest thing on television.

“It’s a poodle, set it on delicate.”