Opinion
Editorial Board
The skunk at the garden party
A bad inflation report helps explain worsening consumer sentiment.
April 10, 2026 at 6:07 p.m. EDT
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The University of Michigan’s consumer sentiment survey, also released Friday, fell to its lowest level ever. The survey, conducted almost entirely before the U.S. ceasefire with Iran was announced, showed a preliminary 10.7 percent drop in confidence. If more tankers start moving through the Strait of Hormuz, that will probably improve, though there will be delayed cascading effects along supply chains, which could lead to higher prices down the road.
Just as worrisome from the Michigan report: Year-ahead inflation expectations jumped to 4.8 percent. Expecting high inflation can create a self-fulfilling prophecy because it leads companies to raise prices. The State Street PriceStats index found a 1.5 percent increase in retail prices during March alone, the biggest one-month jump it has ever recorded.
These indicators follow a strong jobs report last Friday: Employers added 178,000 jobs in March, despite the war in Iran, as the unemployment rate fell to 4.3 percent.
Taken together, this strongly augurs for the Federal Reserve not cutting interest rates when its governors next meet on April 28-29. The most important goal of monetary policy right now needs to be preventing inflation from gaining any more steam.
more:
http://www.washingtonpost.com/opinions/2026/04/10/inflation-trump-iran-war-gasoline/
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