The most important aspect of the UMIch sentiment survey continues to be 'inflation expectations' which slid further to 3.8% in the next 12 months (lowest since April 2021) and 2.8% for 5-10Y inflation exp...

Source: Bloomberg

However, UMich notes that with ongoing turbulence in the financial sector and uncertainty over the Fed’s possible policy response, inflation expectations are likely to be volatile in the months ahead.

The overall headline sentiment dropped more than expected- down for the first time in four months

Source: Bloomberg

Sentiment declines were concentrated among lower-income, less-educated, and younger consumers, as well as consumers with the top tercile of stock holdings.

Overall, all components of the index worsened relatively evenly, primarily on the basis of persistently high prices, creating downward momentum for sentiment leading into the financial turmoil that began last week.

Buying Conditions also slipped in preliminary March data...

Source: Bloomberg

Finally, UMich notes that this month’s decrease was already fully realized prior to the failure of Silicon Valley Bank, at which time about 85% of our interviews for this preliminary release had been completed.

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