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The divergence between consumer sentiment and economic activity data is widening: The UMich consumer sentiment index fell to 48.1 in September, driven in part by a jump in one-year inflation expectations to 4.6% (up from 4.0% in August). Five-to-ten-year inflation expectations also rose, reaching 3.4%. Also of note, the index's outlook sub-component dropped to its lowest level since 2022. (Bloomberg charts below.) #economy #markets