The University of Michigan consumer survey was released this morning and revealed that their consumer sentiment index fell to 80.8 (the index was around 100 prior to the Covid outbreak in March 2020).
Inflation expectations for the coming 12 months soared to 4.8%.
UMi buying conditions for housing has collapsed (but the measure is lagged one month). House price inflation is running at 14.59% YoY making housing less affordable. Hence, lower consumer sentiment for housing.
Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell are slated to discuss the hot U.S. housing market and the risks it could pose to the financial system at a meeting with fellow regulators on Friday.
The aim of the closed-door session: To make sure the U.S. is not vulnerable to a crisis akin to the one it suffered more than a dozen years ago, when the bursting of a property-price bubble drove top banks to the brink of insolvency and the economy into a deep recession.
The meeting of the Financial Stability Oversight Council, or FSOC, that’s headed by Yellen will come on the heels of two days of testimony by Powell to Congress on the Fed’s semi-annual monetary policy report.
Milton says hi!
