Michigan Consumer Sentiment Drops To 73.2; SP500 Tests Session Lows

On January 10, 2025, the University of Michigan released Michigan Consumer Sentiment report for January. The report indicated that Consumer Sentiment declined from 74.0 in December to 73.2 in January, compared to analyst forecast of 73.8.

Current Economic Conditions improved from 75.1 in December to 77.9 in January, while Index of Consumer Expectations declined from 73.3 to 70.2.

The University of Michigan commented: “January’s divergence in views of the present and the future reflects easing concerns over the current cost of living this month, but surging worries over the future path of inflation.”

Interestingly, year-ahead inflation expectations increased from 2.8% in December to 3.3% in January. This significant increase in inflation expectations puts them above the 2.3% – 3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations increased from 3.0% to 3.3%.

U.S. Dollar Index moved back above the 109.60 level as traders reacted to Michigan Consumer Sentiment report. Forex traders focus on rising inflation expectations, which may force the Fed to be more hawkish than previously expected.

Gold continues to move higher despite strong dollar as demand for precious metals is rising. Currently, gold is trying to settle above the $2690 level.

SP500 tested new lows as traders focused on the Consumer Sentiment report. SP500 has recently managed to settle below the 5850 level and is currently trying to settle below 5820.

For a look at all of today’s economic events, check out our economic calendar.