The war and resultant inflation is what forced capitulation by Trump.
The overall index is a record low 47.6.
Please consider the University of Michigan Consumer Sentiment Survey for April 2026.
Consumer sentiment sank about 11% this month, extending a decline that began with the start of the Iran conflict, and is currently about 9% below a year ago. Demographic groups across age, income, and political party all posted setbacks in sentiment, as did every component of the index, reflecting the widespread nature of this month’s fall. One-year expected business conditions plunged about 20% and is now 6% below last April. Assessments of personal finances declined about 11%, with consumers expressing a substantial increase in concerns over high prices and weaker asset values. Buying conditions for durables and vehicles worsened, again on the basis of high prices. Open ended comments show that many consumers blame the Iran conflict for unfavorable changes to the economy. Note that 98% of interviews were completed prior to the April 7th announcement of a temporary cease-fire. Economic expectations will likely improve after consumers gain confidence that the supply disruptions stemming from the Iran conflict have ended and gas prices have moderated. [Mish: OK when is that?]
Year-ahead inflation expectations surged from 3.8% in March to 4.8% this month, the largest one-month increase since April 2025 (see chart, black dashed line and black circle). The current reading exceeds those seen in 2024 and remains well above the 2.3-3.0% range seen in the two years pre-pandemic. Long-run inflation expectations ticked up from 3.2% last month to 3.4% this month, the highest reading since November 2025. In 2024, values ranged between 2.8% and 3.2%, while in 2019 and 2020, they were consistently below 2.8%.
Current Conditions vs Expectations
The expectations index is a record low 46.1.
University of Michigan Consumer Inflation Expectations
Inflation Expectations Percent
One Year Ahead: 4.8 percent
One Year Ahead 3-Month Moving Average: 4.0 percent
Five Year Ahead: 3.4 percent
Five Year Ahead 3-Month Moving Average: 3.3 percent
The Fed’s target is 2.0 percent.
Trump’s Negotiation Capitulation
Trump ran on campaign promises to cut inflation, reduce energy prices in half, and no more wars.
Trump was a star failure on all counts.
This is what forced a backdown by Trump in negotiations with Iran.
Trump’s Energy Pledge
Clip 1: With the Trump economic plan, we will will cut your energy prices in half within – lock it down – you can get get very angry at me if we don’t do it – but within 12 months your energy prices will be cut in half.
Clip 2: My plan will cut energy prices in half or more than that within 12 months of taking office.
Clip 3: Number one, your energy bill within 12 months will be cut in half. That’s my pledge all over the country. To farmers, that’s my pledge all over the country.
Clip 4: If you vote for me, I will cut your energy and electricity in half within 12 months. We’re gonna cut them down.
Clip 5: And under my plan we will cut energy and electricity in half within 12 months. And that means your homes too.
Clip 6: I will cut your energy and electricity prices in half. 50 percent. Five O, within 12 months of taking office.
Clip 7. My plan will cut energy prices in half within 12 months. We’re gonna have energy prices for businesses, but in my opinion maybe even more importantly for the average household by 12 months from January 20th which is the day we go into office.
Clip 8: I will cut the price of energy and electricity in half. Ready? 12 months from January 20, your electric bill, including cars, air conditioners, heating, everything. Your total electric bill will be fifty, five o, fifty percent less. We’re gonna cut it in half.
Clip 9: And I will cut energy and electricity prices in half within 12 months of taking office. Fifty percent.
Clip 10: The pledge that I am making now, and we’ve done this a little bit over the last month or so, we are going to bring energy down by 50 percent, five o percent, fifty percent within 12 months from January 20.
Portions of those clips are guaranteed to make some great campaign ads for the midterm elections.
Democrats have one easy task in November. All they have to do is run against Trump.
Related Posts
April 9, 2026: Inflation Has Been Above the Fed’s Target for 5 Straight Years
The Fed’s preferred measure of inflation has been above 2 percent since March of 2021.
On March 17, 2026 I noted Six Rules Suggest the Fed Should Not Be Cutting Interest Rates
Nothing changed for the better today.
Finally, on March 30, 2026, I noted Powell Warns the Markets and Trump that His Patience with Inflation Has Limits
Powell’s speech was to Harvard students but read between the lines.
Powell’s warning was aimed straight at Trump.
April 10, 2026: March CPI a Blistering Hot 0.9 Percent Led by Gasoline Up 21 Percent
Inflation in March was a scorcher. Here are some month-over-month and year-over-year charts.
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