U.S. March Final Michigan CSI - Short term inflation expectations rise, long term view stable
The final March Michigan CSI at 53.3 is weaker than the preliminary of 55.5 which appears to be a response to worries over the Middle East and energy prices. The 1 year inflation expectation has been revised up significantly, but the Fed will be relieved to see the 5-10 year view unchanged.
The 1-year inflation view of 3.8% compares to 3.4% in the preliminary and February’s final, but is still below January’s 4.0%. With the March survey still containing responses made for the preliminary data, April is likely to see a further increase.
The 5-10 year view on inflation however is unrevised at the preliminary view of 3.2%, still below the 3.3% seen in January and February. The energy shock is not seen causing a sustained boost to inflation.
The composite index of 53.3 is down 2.2 points from the preliminary and 3.3 points from February. The revisions to current conditions and expectations are similar, the former by 2.0 points to 55.8 and the latter by 2.4 points to 51.7.
On the month however the former is down only 0.8 points and the latter down by 4.8. Worries about the future were building even before the outbreak of war.