Us inflation expectations rise to a 40-year high and depress consumer sentiment to a 10-year freezing point

On Friday, March 11, local time, the US consumer sentiment index released by the University of Michigan fell to its lowest level in a decade in early March, while another figure in the report, one-year inflation, is expected to rise to its highest level in nearly four decades.

Specific data show that the consumer confidence index of the University of Michigan fell to 59.7 in March from 62.8 last month, the lowest since 2011; the current situation index, which measures the current situation, fell to 67.8, the lowest since 2009; and the index of expectations for the future fell to 54.4, the weakest since 2011.

The report also shows that consumers expect prices to rise 5.4 per cent next year, the highest reading since 1981, and inflation expectations remain at 3 per cent over the next five to 10 years. Commodity prices in grocery stores and gas stations were rising before the Russian-Ukrainian war broke out, and now prices are soaring more sharply and widely.

The report also shows that the highest percentage of respondents (1/3) expect their financial situation to deteriorate in the coming year, more than double that of the same period last year. About 54% of people think their income will lag behind inflation in the coming year, a phenomenon that has occurred only six times since the mid-1970s.

"expectations are sensitive to stock market conditions and natural gas prices, so it's not surprising that we see this decline," Pantheon Macroeconomics Chief Economist Ian Shepherdson said in a report. The decline is likely to be even greater, and we are ready for a further decline in the data next month. "

Thursday's consumer price index (CPI) report showed that CPI rose 7.9 per cent in February from a year earlier, driven by rising food, petrol and housing costs.

This could provide a basis for the Fed to enter the rate-raising cycle, with the Federal Open Market Committee ((FOMC)) holding a two-day interest rate meeting next week. The market now expects the Fed to raise interest rates by 25 basis points at the meeting to calm soaring prices.