What the numbers say: Year-ahead inflation expectations rose from 3.6% in March to 4.6% in April, according to the University of Michigan Inflation Expectation Survey. Relevance: The survey is seen as a barometer of public sentiment on inflation. After peaking at over 5% in mid-2022, year-ahead expectations ranged between 4% and 5% for much of the past six months. The seesawing inflation expectations seen in recent months show that consumers doubt that the Federal Reserve will be able to tame inflation in the short term. What's Next? The U.S. Consumer Price Index was up 5% year-over-year in March, the smallest annual increase since June 2021. However, according to the survey, inflation expectations are increasing, which indicates that consumers are uncertain about price increases going forward and may delay purchases until prices stabilize. |
