U.S. consumer confidence weakens, with inflation expectations rising to 4.6% over the next year.

Data from the University of Michigan survey shows that U.S. consumers’ assessments of both their current and future personal financial situations have dropped by roughly 10%, while concerns over high prices continue to rise. Conditions for purchasing durable goods have improved slightly, in part because consumers believe making such purchases now will help them avoid future price hikes. Consumer expectations for short-term business conditions have deteriorated sharply, driven by renewed market concerns over high fuel prices and the potential spillover of escalating trade disputes to the broader economy. Overall, the survey shows that respondents across different political affiliations generally view the U.S. economic outlook as weaker than it was at the start of the year. Following this month’s sharp drop in consumer confidence, confidence among Republican-leaning respondents has fallen by 20% since January 2026, while that of Democratic-leaning respondents has dropped by 13% over the same period. One-year ahead inflation expectations rose from 4.0% last month to 4.6% this month, hitting their highest level since June. This current level is significantly higher than the 3.4% recorded in February before the start of the Iran conflict, and also higher than levels seen in every month of 2024. Long-term inflation expectations edged up to 3.4%, ending a three-month stretch of holding at 3.3%. This expectation remains above the 2.8% to 3.2% range seen in 2024. Federal Reserve official Schmid stated that U.S. debt appears very "extreme", adding that the Federal Reserve has not yet resolved the inflation issue.