Citi(US:C)2025-05-19 09:58Investment Rating - The report does not explicitly provide an investment rating for the industry or companies discussed Core Insights - The University of Michigan Sentiment index fell to 50.8 from 52.2, indicating a weaker consumer sentiment than expected [1][3][4] - Inflation expectations have risen, with 1-year expectations increasing to 7.3% from 6.5% and 5-10 year expectations rising to 4.6% from 4.4% [3][5] - The decline in consumer sentiment may not yet fully reflect recent tariff pullbacks, suggesting potential for improvement in future releases [4][5] Summary by Sections Consumer Sentiment - The University of Michigan Sentiment index has decreased for five consecutive months, indicating persistent weakness in consumer sentiment [4] - The current conditions and expectations indices both fell, contributing to the overall decline in sentiment [3] Inflation Expectations - 1-year inflation expectations are at their highest level since 1981, reflecting significant concerns about rising prices [5] - There is a notable divergence in inflation expectations based on political party affiliation, which may influence consumer behavior [5] - Recent tariff pullbacks are likely not fully accounted for in inflation expectations, indicating potential volatility in future readings [5] Economic Outlook - The report suggests that while consumer sentiment is weak, it remains uncertain whether this will lead to a reduction in consumer spending in the coming months [4]