US long-term inflation expectations hit a 30-year high in the UMich survey

February 21, 2025 at 03:18PM
Did people really think Donald Trump was going to lower grocery prices?

For all the thinking and analyzing people do about the election, there was one party that oversaw a spike in inflation and Donald Trump who said he was going to lower prices on Day 1.

Of course, there’s no magic wand and Trump quickly said “it’s going to be hard” to bring down prices. Could it be as simple as low-information voters thinking he could actually bring down prices?

In any case, since then the tariff talk certainly hasn’t cooled the flames of inflation. Now here we are with long-term inflation expectations in the UMich survey at the highest since the 1990s.

I don’t care for the main survey but the Fed watches this inflation number closely and it was a big part of the reason the Fed panicked into a rate hike early in the post-covid cycle. This will get their attention.

This article was written by Adam Button at www.forexlive.com.