September Consumer Sentiment Dips to 55.1, Inflation Expectations Moderate

September Consumer Sentiment Data

• 📉 The final September reading for University of Michigan consumer sentiment came in at 55.1, down from 55.4, marking the weakest sentiment since May.
• ⚠️ Current economic conditions also deteriorated, falling to 60.4 from 61.2, also the lowest since May.
• 📉 Expectations for the future declined slightly from 51.8 to 51.7, remaining at their weakest level since May.

Inflation Expectations

• 📈 One-year inflation expectations moderated slightly, coming in at 4.7% compared to the mid-month estimate of 4.8%.
• 📊 Five to ten-year inflation expectations decreased to 3.7% from 3.9% mid-month, comparing to 3.5% in February.

Market Reaction and Economic Context

• ⚖️ The market reaction to these numbers was muted, described as a "kind of a wash."
• 📈 The 10-year Treasury yield is up about a basis point on the session, settling at 4.13% last week, down five basis points for the week.
• 📉 The 2-year Treasury yield settled at 2.57% last week, down almost 10 basis points for the week and virtually unchanged on the day.
• ⚠️ Income and spending data, along with PCE numbers, were described as "rather sticky."