- The feeling of the consumer in the US is expected to remain moderate, according to the Michigan University Survey.
- The main approach will be five -year inflation expectations continue to fall after having decreased in May for the first time since December 2024.
- The US dollar index could extend its fall to new minimums of several years.
United States (USA) will see the publication of the preliminary estimate of the June consumer index of the University of Michigan (UOM) on Friday. The report is a monthly survey conducted by the university that collects information on the expectations of consumers for the economy. Two weeks after the publication of preliminary reading, the UOM publishes a final estimate.
The report includes different sub-reading, which have impacted financial markets lately. On the one hand, it offers an index of current conditions and an index of consumer expectations. On the other hand, and more critical for financial markets, it offers inflation expectations for one year and five years.
The feeling of the consumer, according to the UOM, stood at 52.2 in May, without changes compared to April, after having fallen for four consecutive months. The current conditions index fell to 58.9 from 59.8 in the same period, while the consumer expectations index rose modestly to 47.9 from 47.3.
Inflation expectations in the center of attention after tariff problems
More relevant, the inflation perspective component one year after the survey increased to 6.6% from 6.5%, while the five -year inflation perspective decreased to 4.2% from 4.4% recorded in April.
The official report indicates: “This is the smallest increase since the election and marks the end of a four -month run of extremely large increases in short -term expectations”, referring to the perspective of inflation to one year, adding that the fall in the long -term prices perspective was the first since December 2024.
“Since consumers generally expect tariffs to move to consumer prices, it is not surprising that commercial policy has influenced consumers’ opinions on the economy. In contrast, despite the many holders on the bill of taxes and expenses that are advancing in Congress, the bill does not seem to be relevant to consumers at this time,” the report added.
The figures could have a significant impact on the financial markets, particularly after the publication of the May Consumer Price Index (CPI) on Wednesday. Inflation, measured by change in the CPI, rose to 2.4% in annual terms in May from 2.3% in April, below the expected 2.5%, according to the US Labor Statistics Office (BLS).
Additional relief signals in inflationary pressures could revive trust in US economic performance and relieve concerns related to tariffs.
How can the UOM report affect the US dollar?
The American dollar index (DXY) collapsed on Thursday to minimum of several years in the 98.70 region in the midst of new commercial and geopolitical tensions.
Despite the decrease in commercial tensions between the US and China, US President Donald Trump made some worrying comments on Wednesday, stating that he was willing to extend the term of July 8 to complete commercial negotiations, but also added that he is ready to impose unilateral tariffs in two weeks.
The feeling of the market also deteriorated due to the renewed tensions in the Middle East. The news indicates that Israel is preparing for an operation against Iran, with the US waiting for retaliation measures. The headline arrived after the nuclear conversations between the US and Iran seem to have stopped.
Valeria Bednarik, chief analyst of FXSTERET, points out: “The DXY is extremely oversized, according to technical readings in the daily graph, but there are no signals of downward exhaustion. Since the fall is driven by feeling, additional landslides cannot be ruled out. Speculative interest will look for reasons to continue selling the dollar, although the DXY could recover before the weekly closing in the middle of the weekly closure in the middle of the weekly closure.
Bednarik adds: “The DXY touched around 97.70 on a weekly base in March 2022, the immediate support area. Once below, the index could extend its fall towards the 97.00 mark. On the contrary, a recovery would see the index to test the threshold of 98.00, before 98.35, where the DXY touched background on June 5.”
Commercial War between the US and China Faqs
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
Economic indicator
1 year consumer inflation expectations of the University of Michigan
The indicator of Inflation expectations of the University of Michigan Capture how much consumers anticipate that prices will change in the next 12 months. It is published in two rounds: a preliminary, which usually has more impact, followed by an update reviewed two weeks later.
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Next publication:
Old Jun 13, 2025 14:00 (PREL)
Frequency:
Monthly
Dear:
–
Previous:
6.6%
Fountain:
University of Michigan
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
