The University of Michigan has just released its preliminary U.S. Consumer Sentiment Index for early October. The index came in at 46.3, below market expectations of 47.8 and the previous reading of 48.1. The preliminary 1-year inflation expectations reading also rose to 4.7%, up from 4.60%, while long-term inflation expectations for the next 5–10 years edged up to 3.5%.
A breakdown of the figures shows that the Current Conditions Index plunged from 50.9 to 44.7, reflecting significantly greater strain on consumers’ perceptions of the current economy. Interestingly, however, the Consumer Expectations Index edged up to 47.3, suggesting that while people are quite concerned about current conditions, views on the medium- to long-term outlook are sharply divided.
The data sent mixed signals to traditional financial markets. On the one hand, falling consumer confidence often points to a potential cooling in consumer spending, weighing on economic growth. On the other, rising short- and long-term inflation expectations mean the Federal Reserve continues to face a challenge in balancing an economic slowdown against the fight against inflation.
For crypto markets, short-term liquidity and sentiment remain constrained by macroeconomic data. If inflation expectations remain stubbornly elevated, expectations for a turning point in liquidity may be pushed back. But fluctuations in the economic outlook could also prompt rapid rotations between safe-haven and risk assets, leaving markets likely to remain range-bound. #ConsumerConfidence #MacroEconomy #InflationWatch
A breakdown of the figures shows that the Current Conditions Index plunged from 50.9 to 44.7, reflecting significantly greater strain on consumers’ perceptions of the current economy. Interestingly, however, the Consumer Expectations Index edged up to 47.3, suggesting that while people are quite concerned about current conditions, views on the medium- to long-term outlook are sharply divided.
The data sent mixed signals to traditional financial markets. On the one hand, falling consumer confidence often points to a potential cooling in consumer spending, weighing on economic growth. On the other, rising short- and long-term inflation expectations mean the Federal Reserve continues to face a challenge in balancing an economic slowdown against the fight against inflation.
For crypto markets, short-term liquidity and sentiment remain constrained by macroeconomic data. If inflation expectations remain stubbornly elevated, expectations for a turning point in liquidity may be pushed back. But fluctuations in the economic outlook could also prompt rapid rotations between safe-haven and risk assets, leaving markets likely to remain range-bound. #ConsumerConfidence #MacroEconomy #InflationWatch