UMich September prelim consumer sentiment 55.4 vs 58.0 expected | Metals Mine

  • UMich September prelim consumer sentiment 55.4 vs 58.0 expected

    From investinglive.com

    Prior was 58.2 • Current conditions 61.2 vs 61.3 expected (prior 61.7) • Expectations 51.8 vs 54.9 expected (prior 55.9) • 1-year inflation 4.8% vs 4.8% prior • 5-year inflation 3.9% vs 3.5% prior The University of Michigan survey was once the gold-standard in confidence surveys but it's been slowly eroded by the politicization of everything and it's more signal than noise at this point. The Fed still watches it and a jump in inflation expectations post-covid caused a bit of a panic at the Fed and a late-signalled jump rate hike but it was later revised away in a bit of an embarrassing moment for ... (full story)

Added at 9:14am

  • Consumer Sentiment Declined 4.8% to 55.4 in Early August

    From floordaily.net

    Consumer sentiment fell 4.8% to 55.4 in early September, according to preliminary results from the University of Mighican Survey of Consumers. This represents a 21% decline year over year. “Consumer sentiment moved down less than three index points in early September,” according to Survey of Consumer director Joanna Hsu. “This month’s easing in economic views was particularly strong among lower and middle income consumers. Buying conditions for durables improved, while all other index components fell. Consumers continue to note multiple vulnerabilities in the economy, with rising risks to business conditions, ... (full story)

Comment Options
ntrpy
Sep 12, 2025 9:09am
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Initial market reaction will likely be choppy as it digests the conflicting signals, but the underlying message is clear: the US is facing a stagflationary environment that the Eurozone, according to the ECB & Lagarde yesterday, is not.

The expectation of unemployment chart (attached) is screaming "recession" - the red line, showing the percentage of consumers expecting unemployment to rise, is spiking towards levels not seen since the 2008 financial crisis. A clear signal that the sharp rise in jobless claims is not a blip; it reflects a genuine and growing fear among households about the labour market. This directly validates the Fed's pivot to prioritising employment risks.

The terrible consumer outlook and spiking unemployment fears make a rate cut next week a necessity. They have to act. However, the sticky and rising inflation expectations will tie their hands. They cannot be seen to be letting inflation run wild. This corners them into a policy of cutting interest rates despite a persistent inflation problem. This is the most fundamentally bearish scenario for the currency, as it erodes its real yield and store-of-value status.

Grim readings for the Fed all round, especially as we now enter the blackout period.
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ntrpy
Sep 12, 2025 9:32am
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Quoting Fadhl
{quote} Spot on and very nice analysis! Thanks for sharing!
No worries, they're from my desk notes, glad others find them useful too.
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Fadhl
Sep 12, 2025 9:28am
Permalink
Quoting ntrpy
Initial market reaction will likely be choppy as it digests the conflicting signals, but the underlying message is clear: the US is facing a stagflationary environment that the Eurozone, according to the ECB & Lagarde yesterday, is not. The expectation of unemployment chart (attached) is screaming "recession" - the red line, showing the percentage of consumers expecting unemployment to rise, is spiking towards levels not seen since the 2008 financial crisis. A clear signal that the sharp rise in jobless claims is not a blip; it reflects...
Spot on and very nice analysis! Thanks for sharing!
Reply
ntrpy
Sep 12, 2025 9:45am
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Quoting chess king
And what to do? Lower interest rates ?
25bps is already priced in, 50bps is now unlikely due to the hotter-than-expected CPI print yesterday.

Further, sell-side analysts are almost all universally pricing in sequential cuts for the next four Fed meetings.

This widening policy divergence between the Fed and its two largest peers (ECB/BoJ) is putting downwards pressure on the dollar.
Reply
ntrpy
Sep 12, 2025 9:54am
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Quoting Trader#A237
{quote} Agreed 110%. Always a please reading your posts though the mountain of nonsense on here @ntrpy. Should also be noted that the FED has made it pretty clear that they are more than likely going to agree on a policy shift - which is currently moderately restrictive. Hence the strength since, basically. All this negative data just adds to the case that not only 50bps is needed.
Speaking freely (rather than objectively), I am inclined to agree with you, more cuts are needed. The labour market outlook makes for grim reading at the moment.

However, the hot CPI print, increased inflation expectations and Powell's general obstinance in the face of a slowing economy, suggest that unless Cook is fired before the next meeting, we most likely will only see a 25bps cut this time around - this is also what most IBs are forecasting.

In the longer-term however, as the Fed becomes increasingly politicised, I think we will see rate cuts accelerate, from meeting to meeting.
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chess king
Sep 12, 2025 9:48am
Permalink
Quoting ntrpy
{quote} 25bps is already priced in, 50bps is now unlikely due to the hotter-than-expected CPI print yesterday. Further, sell-side analysts are almost all universally pricing in sequential cuts for the next four Fed meetings. This widening policy divergence between the Fed and it's two largest peers (ECB/BoJ) is putting downwards pressure on the dollar.
thank you
Reply
ww3361
Sep 12, 2025 10:02am
Permalink
Quoting Trader#A237
{quote} Agreed 110%. Always a please reading your posts though the mountain of nonsense on here @ntrpy. Should also be noted that the FED has made it pretty clear that they are more than likely going to agree on a policy shift - which is currently moderately restrictive. Hence the strength since, basically. All this negative data just adds to the case that not only 50bps is needed. They'll need to cut 75-100bps pretty fast if this hard data trend continues. FF bears will have a case for a nice move down. Interest rates too low means recession/depression...
Fed aren’t gonna be employing people mate. They can only ease credit conditions. But are bound by inflation. Don’t understand why people on here think the fed can now ignore their inflation mandate?
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ww3361
Sep 12, 2025 1:47pm
Permalink
Quoting Trader#214D
{quote} Well the market says you are wrong. Inflation is elevated but contained and definitely not getting worse. On the other hand the jobs market numbers have been catastrophically bad. Look at 2 year yields. Everyone is betting on about 1 point of cuts over the coming months. One mandate is not great but not terrible. The other mandate is really terrible. They have no choice but to cut, and keep cutting unless the numbers reverse. Everyone is drastically underestimating how bad the job will be going forward. Every company talking about layoffs...
The market isn’t capable of expressing right/wrong. You are merely projecting right/wrong delusion onto it.

I’m happy with my insight: Employment and inflation are not equal members here. Sorry bud.
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ww3361
Sep 12, 2025 4:57pm
Permalink
Quoting Trader#77C9
{quote} Priorities dub dub, priorities. FED only indicate their stance. It was clear last FOMC meeting that a policy shift was now most likely going to happen next rate decision (see news at the time). You are right the FED only encourages business to borrow, and hopefully, employ. They typically favor tackling unemployment over inflation. Each scenario of course needs to be treated on its own merit. I think Bessent covers this in his Uni assignment essay (also floating around, posted here 10,000 times). Think of it this way, high inflation will...
Where do people find the time for such wordy waffle?
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aminmaghsoud
Sep 12, 2025 9:08am
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It wasn't important news at all.
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Trader#E14A
Sep 12, 2025 9:12am
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Quoting ntrpy
Initial market reaction will likely be choppy as it digests the conflicting signals, but the underlying message is clear: the US is facing a stagflationary environment that the Eurozone, according to the ECB & Lagarde yesterday, is not. The expectation of unemployment chart (attached) is screaming "recession" - the red line, showing the percentage of consumers expecting unemployment to rise, is spiking towards levels not seen since the 2008 financial crisis. A clear signal that the sharp rise in jobless claims is not a blip; it reflects...
I appreciate your analysis, they are always thorough, and extremely clear to understand. non biased
Reply
Trader#214D
Sep 12, 2025 10:11am
Permalink
They have shown sentiment readings don’t mean anything. If things are terrible then why are consumers still spending and corporate profits strong? People almost always respond more negatively than they actually act. Which is why nothing reacted much to this.

Actual job numbers and actual consumer spending is what will matter going forward.
Reply
Trader#77C9
Sep 12, 2025 10:36am
Permalink
Quoting ww3361
... people on here think the fed can now ignore their inflation mandate?
Priorities dub dub, priorities. FED only indicate their stance. It was clear last FOMC meeting that a policy shift was now most likely going to happen next rate decision (see news at the time).

You are right the FED only encourages business to borrow, and hopefully, employ. They typically favor tackling unemployment over inflation. Each scenario of course needs to be treated on its own merit. I think Bessent covers this in his Uni assignment essay (also floating around, posted here 10,000 times).

Think of it this way, high inflation will increase prices - people can live with that (they have been doing so since covid - tough but they live). Bit of a dog's act to go all in on more tariffs after his people have just been plundered for the past 5 years, don't you think? How is that FOR the people?

No jobs means people have no money anyway - do what you want with interest rates THERE'S NO JOBS!!! Increased prices mean squat if people can't afford to buy anything. That will crash inflation (fast) and the economy will plunge into an abyss I think we all agree, that, nobody wants to see. I certainly do not.

The worry is that Trump has no idea. If this all turns pear-shaped (looking grim with recent political assassinations and a media craze that is just flat out scary - on ya Murdoch) and say for argument sake (emphasis here), U.S.A goes worse case into a civil war. That may well kill the wall st. bull. Something I believed was impossible, and still do mind you!

Long way to go before that happens. It's such an outside tin foil hat chance, it definitely has no bearing on your trade today or even tomorrow.

@ntrpy is absolutely right. Powell and a bipartisan FED is stuck between a rock and a hard place. Trump triggered inflation, remember with his tariffs? Now the labor market is rocky, he's an utter twat. Especially if this goes and his midnight tweets can't pull it back.

Things were on track before Trump took over the wheel. I just hope and pray for the US of A that he doesn't ruin it for you/us all.

> They have shown sentiment readings don’t mean anything

It's the culmination of hard data that is painting a pretty grim picture at the moment.
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ntrpy
Sep 12, 2025 9:18am
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Quoting Trader#E14A
{quote} I appreciate your analysis, they are always thorough, and extremely clear to understand. non biased
You're very welcome.
Reply
chess king
Sep 12, 2025 9:38am
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And what to do?
Lower interest rates ?
Reply
Dnuhu
Sep 14, 2025 8:45am
Permalink
Quoting ntrpy
Initial market reaction will likely be choppy as it digests the conflicting signals, but the underlying message is clear: the US is facing a stagflationary environment that the Eurozone, according to the ECB & Lagarde yesterday, is not. The expectation of unemployment chart (attached) is screaming "recession" - the red line, showing the percentage of consumers expecting unemployment to rise, is spiking towards levels not seen since the 2008 financial crisis. A clear signal that the sharp rise in jobless claims is not a blip; it reflects...
Wow, this was useful.
I loved your analysis.
Reply
dovishhawk1
Sep 12, 2025 9:08am
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Lesser sentimental.
Reply
Erkaa
Sep 12, 2025 9:18am
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po ha ha, dxy go up
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Trader#A237
Sep 12, 2025 9:38am
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Quoting Trader#E14A
{quote} I appreciate your analysis, they are always thorough, and extremely clear to understand. non biased
Agreed 110%. Always a please reading your posts though the mountain of nonsense on here @ntrpy.

Should also be noted that the FED has made it pretty clear that they are more than likely going to agree on a policy shift - which is currently moderately restrictive. Hence the strength since, basically.

All this negative data just adds to the case that not only 50bps is needed. They'll need to cut 75-100bps pretty fast if this hard data trend continues. FF bears will have a case for a nice move down. Interest rates too low means recession/depression (see post GFC @ 0%).

No jobs === up a creek without a paddle, inflation or not. FED will prioritize it. Trump will be happy that his Too Late finally gives him a little win (cut him some slack, he hasn't had many lol).

Drops like that give the best buy ops however. I will be licking my chops if we get another Deep Discount Sale like 2008-2009. S&P lost near 50% IIRC. Wild times.
Reply
Trader#214D
Sep 12, 2025 10:16am
Permalink
Quoting ww3361
{quote} Fed aren’t gonna be employing people mate. They can only ease credit conditions. But are bound by inflation. Don’t understand why people on here think the fed can now ignore their inflation mandate?
Well the market says you are wrong. Inflation is elevated but contained and definitely not getting worse.

On the other hand the jobs market numbers have been catastrophically bad. Look at 2 year yields. Everyone is betting on about 1 point of cuts over the coming months.

One mandate is not great but not terrible. The other mandate is really terrible. They have no choice but to cut, and keep cutting unless the numbers reverse.

Everyone is drastically underestimating how bad the job will be going forward. Every company talking about layoffs and using ai. No companies are talking about hiring.
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FXWish
Sep 12, 2025 10:26am
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Next week will be volatile for most pairs
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Trader#77C9
Sep 12, 2025 11:35am
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TACO was really all about waiting for the outcomes (this is why hard data is so hot atm). It is all hearsay at the end of the day, just to ground you all.

Now stuff IS changing though, and quite rapidly. You don't mess with entire economies like this. Not in such a reckless way. When they tip, they are hard to pull back off a silly tweet. Ahhhhh hem, April and his Buy DJT tip right on the lows? Come on people, wake up and smell the dog pile you've been buried in.

My only question is why oh why Mr. Trump? What's the true end game here? I am not sure what end he see's. I doubt he does either to be brutally honest.
Reply
Dnuhu
Sep 13, 2025 7:23am
Permalink
Quoting Trader#E14A
{quote} I appreciate your analysis, they are always thorough, and extremely clear to understand. non biased
Wow, this was useful.
I loved your analysis.
Reply
Trader#42A2
Sep 12, 2025 9:07am
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what about gold no bullish or bearish
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Trader#A614
Sep 12, 2025 9:07am
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It didn't matter to any trader.
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Trader#BC38
Sep 12, 2025 9:29am
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Hold on this might help and people are doubting it Look at Gold it's Hitting A reversal and its selling
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Trader#5A19
Sep 12, 2025 9:34am
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They are manipulation the market ..F
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