The University of Michigan commented: “January’s divergence in views of the present and the future reflects easing concerns over the current cost of living this month, but surging worries over the future path of inflation.”
Interestingly, year-ahead inflation expectations increased from 2.8% in December to 3.3% in January. This significant increase in inflation expectations puts them above the 2.3% – 3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations increased from 3.0% to 3.3%.
U.S. Dollar Index moved back above the 109.60 level as traders reacted to Michigan
