UMich inflation expectations
  • Prelim reading was 3.3%
  • Prior reading was 3.0%
  • 1-year inflation 5.3% vs 5.4% prelim
  • Prior 1-year inflation 5.3%
  • Sentiment final 50.0 vs 50.4 prelim
  • Current conditions final 53.8 vs 55.4 prelim
  • Expectations final 47.5 vs 46.8 prelim

Fed Chair Powell cited the jump in inflation expectations as a big reason why the FOMC shifted to 75 bps from 50 bps.Now it's been revisd back to where it was for most of the past year. What an embarrassment.

For what it's worth, he did flag the chance that it could be revised:

So, if you look at a broad range of inflation expectations, so you've got the public, you've got surveys of the public and of experts and you've also got market based. And I think if you look across that broad range of data, what you see is that expectations are still in the place, very much in the place, where short-term inflation is going to be high, but comes down sharply over the next couple of years. And that's really where inflation expectations are and also, as you get away from this episode, they get back down close to 2 percent. And so, this is really very important to us that that remain the case. And I think if you look for most measures, most of the time, that's what you see. If we even see a couple of indicators that bring that into question, we take that very seriously. We do not take this for granted, we take it very seriously. So the preliminary Michigan reading, it's a preliminary reading, it might be revised, nonetheless it was quite eye catching and we noticed that. We also noticed that the Index of Common Inflation Expectations at the Board has moved up after being pretty flat for a long time, so we're watching that and we're thinking this is something we need to take seriously. And that is one of the factors as I mentioned. One of the actors in our deciding to move ahead with 75 basis points today was what we saw in inflation expectations.