Evelyn Reynolds

The University of Michigan consumer survey’s mid-month reading on sentiment fell to 50.8, down from 57.0 in March and below the Dow Jones consensus estimate for 54.6.
Respondents’ expectation for inflation a year from now leaped to 6.7%, the highest level since November 1981 and up from 5% in March.

Consumer sentiment grew even worse than expected in April as the expected inflation level hit its highest since 1981, a closely watched University of Michigan survey showed Friday.
The survey’s mid-month reading on consumer sentiment fell to 50.8, down from 57.0 in March and below the Dow Jones consensus estimate for 54.6. The move represented a 10.9% monthly change and was 34.2% lower than a year ago. It was lowest reading since June 2022 and the second lowest in the survey’s history going back to 1952.

As sentiment moved lower, inflation worries surged.
Respondents’ expectation for inflation a year from now leaped to 6.7%, the highest level since November 1981 and up from 5% in March. At the five-year horizon, the expectation climbed to 4.4%, a 0.3 percentage point increase from March and the highest since June 1991.
Other measures in the survey also showed deterioration.
The current economic conditions index fell to 56.5, an 11.4% drop from March, while the expectations measure slipped to 47.2, a 10.3% fall and its lowest since May 1980. On an annual basis, the two measures dropped 28.5% and 37.9%, respectively.
Stocks turned negative following the report and Treasury yields added to gains.

“Consumers have spiraled from anxious to petrified,” wrote Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.
Sentiment declines came across all demographics, including age, income and political affiliation, according to Joanne Hsu, the survey’s director.
“Consumers report multiple warning signs that raise the risk of recession: expectations for business conditions, personal finances, incomes, inflation, and labor markets all continued to deteriorate this month,” Hsu said.
In addition to the other readings, the survey showed unemployment fears rising to their highest since 2009.
The survey comes amid concerns that President Donald Trump’s tariffs will raise inflation and slow growth, with some prominent Wall Street executives and economists expecting the U.S. could teeter on recession over the next year.
To be sure, the survey’s readings are generally counter to market-based expectations, which indicate little worry of inflation ahead. However, Federal Reserve officials in recent days say they fear that consumer expectations can quickly become reality if behavior changes. Consumer and producer inflation readings this week showed price pressures easing in March.
Also, the University of Michigan survey included responses between March 25 and April 8, the end period coming the day before Trump announced a 90-day stay on aggressive tariffs against dozens of U.S. trading partners.
Get Your Ticket to Pro LIVE
Join us at the New York Stock Exchange!Uncertain markets? Gain an edge with CNBC Pro LIVE, an exclusive, inaugural event at the historic New York Stock Exchange.
In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.
Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!

Don’t miss these insights from CNBC PRO More

The producer price index, declined a seasonally adjusted 0.4% for the month, after rising 0.1% in February. Economists surveyed by Dow Jones had been looking for an increase of 0.2%.
More than 70% of the slide in final demand prices came from a 0.9% tumble in goods prices, a key measure as policymakers look for inflation drivers.

Wholesale prices unexpectedly fell in March, setting up a favorable inflation backdrop as President Donald Trump began intensifying tariffs against U.S. trading partners, the Bureau of Labor Statistics reported Friday.
The producer price index, considered a leading indicator for pipeline inflation pressures, declined a seasonally adjusted 0.4% for the month, after rising 0.1% in February. Economists surveyed by Dow Jones had been looking for an increase of 0.2%.

Excluding food and energy, the so-called core PPI also dropped, down 0.1% against the estimate for a 0.3% increase. The index less food, energy and trade services increased 0.1%.
Stock market futures and Treasury yields both were higher following the release.
More than 70% of the slide in final demand prices came from a 0.9% tumble in goods prices, a key measure as policymakers look for inflation drivers. Most of that drop was attributed to an 11.1% slide in gasoline prices. Services prices also pulled back, falling 0.2%.
Nevertheless, the indicators showed inflation still holding above the Federal Reserve’s 2% target.
Headline PPI showed a 2.7% 12-month rate, while the index excluding food, energy and trade services was at a 3.4% rate.

Moreover, March inflation measures will be viewed as somewhat stale considering the uncertainty behind Trump’s trade policy. The president slapped a broad 10% levy against all imports while also revealing a menu of individual duties against dozens of other trading partners. Trump on Wednesday backed off what he termed “reciprocal” tariffs, instituting a 90-day negotiation period in an effort to reduce the U.S. trade deficit.
The BLS on Thursday also reported that consumer price pressures were easing, down 0.1% for a headline rate of 2.4% and a core reading of 2.8% that was the lowest in four years.
Minneapolis Fed President Neel Kashkari, in a CNBC interview earlier Friday, said there was “a lot of good news under the hood” about the CPI report, though he noted that the inflation data gets “pretty stale, pretty quickly” in light of the tariff news.
Get Your Ticket to Pro LIVE
Join us at the New York Stock Exchange!Uncertain markets? Gain an edge with CNBC Pro LIVE, an exclusive, inaugural event at the historic New York Stock Exchange.
In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.
Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!

Don’t miss these insights from CNBC PRO More

Minneapolis Federal Reserve President Neel Kashkari said recent market trends show investors are moving away from the U.S. as the safest place to invest.
Treasury yields are rising while the U.S. dollar has sagged against its global counterparts.
The central bank official said that is counter to what one might normally expect.

Minneapolis Federal Reserve President Neel Kashkari said Friday recent market trends show investors are moving away from the U.S. as the safest place to invest while President Donald Trump’s trade war escalates.
With Treasury yields rising and the U.S. dollar sagging against its global counterparts in recent days, the trends are running counter to what you might normally see, the central bank official said during a CNBC “Squawk Box” interview.

“Normally, when you see big tariff increases, I would have expected the dollar to go up. The fact that the dollar is going down at the same time, I think, lends some more credibility to the story of investor preferences shifting,” Kashkari said.
The 10-year Treasury yield has surged this week after Trump announced his intention to slap a 10% across-the-board tariff against U.S. trading partners and threatened to impose even harsher select levies before backing down Wednesday.
At the same time, the greenback has slumped more 3% against a basket of global currencies, with moves potentially signifying a turn away from safe-haven U.S. assets.
“Investors around the world have viewed America as the best place to invest, and if that’s true, we will have a trade deficit. So now one of the ways that expresses itself is in lower yields across asset classes in America,” Kashkari said. “If the trade deficit is going to go down, it could be that investors are saying, OK, America no longer is the most attractive place in the world to invest, and then you would expect to see bond yields go up.”
Kashkari noted, however, that he is seeing “stresses” but not significant dislocations in market functioning.

Kashkari does not vote this year on the rate-setting Federal Open Market Committee but will vote in 2026. He noted that his focus in the current environment is on keeping inflation expectations anchored, echoing other policymakers’ statements that rates are unlikely to move until there is clearer visibility on fiscal and trade policy.
Get Your Ticket to Pro LIVE
Join us at the New York Stock Exchange!Uncertain markets? Gain an edge with CNBC Pro LIVE, an exclusive, inaugural event at the historic New York Stock Exchange.
In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.
Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!

Don’t miss these insights from CNBC PRO More

The U.K. economy grew by 0.5% month-on-month in February, official data showed on Friday.
The latest print firmly beat analyst expectations near 0.1% in a LSEG survey.
The Office for National Statistics, which published the provisional figures, said a 0.3% expansion in the services sector had driven the surprise jump in growth.

People browsing stalls along Portobello Road Market on Feb. 22, 2025, in Notting Hill, West London.
Mike Kemp | In Pictures | Getty Images

The U.K. economy grew by a higher-than-expected 0.5% month-on-month in February amid a jump in the services output, official data showed on Friday.
Analysts had projected a monthly gross domestic product hike of 0.1% in February, according to LSEG data.

The Office for National Statistics, which published the provisional figures, said a 0.3% expansion in the services sector had driven the surprise jump in growth. In January, services had recorded a 0.1% monthly rise.
Production output saw a substantial recovery in February, notching 1.5% month-on-month growth compared to the monthly contraction of 0.5% seen in January. Construction output also staged a recovery in February, adding 0.4% on the month after falling 0.3% in January.
The British pound jumped against the dollar after the data release, rising 0.6% against the greenback to trade at $1.3047 by 8:08 a.m. in London.
In January, an early estimate showed the U.K. economy unexpectedly shrank by 0.1% on a monthly basis. That figure was later revised upward to show that economic growth was flat in January.
The U.K. economy has struggled to gain momentum over the past year. ONS data showed earlier this year that Britain’s GDP expanded by 0.1% in the fourth quarter of last year, after flatlining in the three months prior.

Friday’s figures are released as the U.K. braces for the economic impact of new 10% tariffs on its exports to the United States.
British lawmakers had been hoping to avoid the full force of U.S. President Donald Trump’s tariffs regime, with America accounting for 17% of Britain’s international trade in the year to September 2024 — making it the Britain’s largest trading partner.
Trump’s suspended reciprocal tariffs, if reinstated once their pause ends this summer, would slap the U.K. with additional 10% duties on British goods.
Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, said that the uncertainty created by the tariffs would likely override Friday’s better-than-expected economic data, when it comes to the Bank of England’s decision whether to trim interest rates next month.
Markets are currently pricing in a 25-basis-points interest rate cut from the Bank of England in May, according to LSEG data, which would bring the central bank’s core interest rate down to 4.25%.
“Though activity rebounded strongly as services and manufacturing output rallied, February’s figures have been pushed firmly into the background by the financial market bedlam caused by Trump’s tariff announcements,” Thiru said.
“The greater global financial and economic instability caused by the US tariff announcements makes a May rate cut look more likely than not, by further fuelling rate setters’ concerns over the underlying resilience of the UK economy.”
Meanwhile, major welfare spending cuts and a greater tax burden on businesses have created concerns about the outlook for the economy.
Last month, the U.K.’s Office for Budget Responsibility halved its growth forecast for the U.K., slashing its outlook from 2% to 1% growth in 2025. More

Economist Erica York said Thursday that the cumulative U.S. tariff rate on China of 145% would cut off most trade between the two countries.
The Tax Foundation estimates that Trump’s new tariffs lead to more than $170 billion increase in federal tax revenues for 2025.
York’s comments come as the market reversed some of the gains seen in Wednesday’s historic rally.

U.S. President Donald Trump attends a cabinet meeting at the White House in Washington, D.C., U.S., April 10, 2025.
Nathan Howard | Reuters

President Donald Trump’s tariff increase on imports from China would basically end most trade between that country and the U.S., according to economist Erica York.
“It depends on how narrowly the tariff is applied or how broadly it’s applied, but generally if you get north of a triple-digit tariff, you are cutting off most trade,” the vice president of federal tax policy at the Tax Foundation’s Center for Federal Tax Policy said on CNBC’s “The Exchange” on Thursday. “There may still be some things without any substitutes that companies just have to foot the bill, but for the most part, that cuts it off.”

Her remarks came amid the market wiping out some of its monster gains seen on Wednesday. The market accelerated declines on Thursday once a White House official confirmed to CNBC that the U.S. tariff rate on Chinese goods now stands at 145%. That total includes the recent hike to 125% from 84% that Trump announced Wednesday as well as a 20% fentanyl-related duty that the president had previously put into effect.
York stressed that the market still isn’t in the clear, saying “it’s not like the threat went away entirely,” as no clarity is expected until July when the tariff reversal is scheduled to end.
On Wednesday, Trump announced that he’s temporarily reducing the tariff rates on imports from most countries, except China, to 10% for 90 days. In a Cabinet meeting Thursday, the president declined to rule out the possibility of extending the 90-day reprieve.
Taking into account the China tariffs, the baseline 10% levies still in place and other sector tariffs, Trump has still taken the country into its most protectionist stance in decades, even with the pause.
“It’ll take the average tariff rate still to highs that we haven’t seen since the 1940s, so this is major,” the economist added. “It’s huge cost increases. It’s an economic hit. It’s clearly not setting us on a very good path.”

The Tax Foundation estimates that all of the new Trump tariffs will lead to an increase in federal tax revenues of $171.6 billion for this year. That would make Trump’s tariffs the biggest tax increase since 1993, more than the hikes under both former presidents George H.W. Bush and Barack Obama, the institution revealed.
China has said it won’t flinch if trade dynamics were to escalate into a trade war. Just hours prior to Trump’s tariff pause announcement, China raised its retaliatory levies on U.S. imports to 84% from 34%, which went into effect Thursday. More