U.S. Inflation Expectations Surge to Highest Levels Since 2008

Consumer sentiment dips as concerns grow over potential tariffs and the Federal Reserve's policy trajectory.

The University of Michigan's survey showed one-year inflation expectations rose to 3.3% in January, up from 2.8% in December, marking the highest level since May 2024.
Long-term inflation expectations also increased to 3.3%, the highest since 2008, with notable rises among lower-income consumers and political Independents.
Economists attribute the spike in inflation concerns to President-elect Donald Trump's proposed tariffs on imports, which many fear could drive up prices further.
Consumer sentiment declined slightly in January, with the Michigan Consumer Sentiment Index falling to 73.2 from December's 74.0, reflecting economic uncertainty.
The Federal Reserve faces a challenging path as inflation expectations complicate its recent rate cuts aimed at supporting economic growth.