UMich Sentiment Slides In January As Inflation Expectations Hit 10-Year Highs

After a small bounce in December – from decade lows – University of Michigan Sentiment was expected to slip back lower in preliminary January survey data, and it did… more than expected. Both current conditions and expectations fell in the flash January data, dragging the headline print down from 70.6 to 68.8 (below the 70.0 expectations)…

Source: Bloomberg

Current Conditions are the worst since September 2011.

Interestingly, buying conditions for houses rebounded in early January but for vehicles it crashed to a record low…

Source: Bloomberg

Finally, and perhaps most notably, inflation expectations rose significantly in January, with medium-term expectations rising to 3.1% – the highest since January 2011…

Source: Bloomberg

So, will The Fed’s jawboning bring down inflation expectations?