From a big picture point of view, Michigan Consumer Sentiment is mostly flat for the third month in a row.
Year-ahead inflation expectations increased from 2.9% in March to 3.2% in April, while long-run inflation expectations grew from 2.8% to 3.0%. Rising inflation expectations may force the Fed to be more hawkish.
The University of Michigan commented: “Overall, consumers continue to express uncertainty about the future trajectory of the economy pending the outcomes of the upcoming election, but at this time there is no evidence that global geopolitical factors are on the forefront of consumers’ minds.”
U.S. Dollar Index tested session highs as traders reacted to the Consumer Confidence report. Currently, U.S. Dollar Index is trying to settle above the 105.90 level. Treasury yields are moving lower, but this move does not put any pressure on the American currency.
