U.S. household inflation is expected to rise over the next 12 months, despite signs of a slowing economy, suggesting stagflation.
The University of Michigan’s preliminary release of its overall consumer sentiment index for April came in at 63.5, up from 62.0 in March. Economists polled by Reuters had forecast a preliminary reading of 62.0.
Rising inflation expectations may prompt the Federal Reserve to reassess its inflation expectations by maintaining higher interest rates for an extended period of time, which may tank the economy into a downward spiral.
The consumer sentiment index surveys how Americans feel about their finances, as well as the overall economy, with many households being rather pessimistic since last summer, largely due to high inflation….