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The Fed’s worst inflation fears may be coming true as consumers lose faith in long-term prices—and even Trump supporters doubt he can bring relief

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On the same day that Kevin Warsh was sworn in as the new Federal Reserve chairman, the University of Michigan’s consumer sentiment survey delivered a worrisome reading on inflation expectations and a major red flag for the central bank. In addition to the overall index falling for the third straight month to a fresh record low—even undercutting the levels seen during the 1970s oil crisis—inflation...
The narrative presented intertwines macroeconomic data with political polarization and psychological reactions to price volatility. The fact that inflation expectations rose simultaneously with a drop in the consumer index suggests a disconnect between headline economic performance and consumer sentiment regarding future price stability. The analysis points to how political alignment—specifically among independents and Republicans—drives the shift in expectations, indicating that policy percepti...