The Consumer Sentiment survey from the University of Michigan plunged further below its pandemic lows in March as inflation expectations surged to the highest level since 1981. Surging inflation expectations coupled with less positive income expectations led to a record-high 32% of consumers stating that they expect their financial position to worsen in the year ahead. This not only signals that inflationary psychology is becoming ingrained in the consumer, but also that consumer spending (which accounts for 2/3 of U.S. GDP) could soon come under pressure.
