Democrats Abandon Tariff-Flation Narrative Sending UMich Sentiment To 6-Month Highs
After January's big bounce from record lows (as Democrats began to see that the world is not the worst its ever been… and inflation is not going to explode), UMich sentiment was expected to re-dip again in February led by a drop in Current Conditions.
But February's preliminary data showed a continued rebound in sentiment (which is quite shocking given that it comes after the Davos/Greenland debacle) with a surge in Current Conditions dominating a small dip in Expectations to bring the headline sentiment to its highest since August 2025…
Source: Bloomberg
"Sentiment surged for consumers with the largest stock portfolios," said Director of Surveys, Joanne Hsu's, "while it stagnated and remained at dismal levels for consumers without stock holdings."
On net, modest increases in current personal finances and buying conditions for durables were offset by a small decline in long-run business conditions.
Inflation expectations for the next 12 months plummeted to 13-month lows (while medium term expectations rose modestly)…
Source: Bloomberg
…as Democrats and Independents come to their senses…
Source: Bloomberg
It appears mainstream media propaganda about Trump's tariffs worked on some… (is this where the term 'useful idiots' comes from?)
But, according to Democrats' prior panic, inflation is about to go vertical right about now…
…we wait with bated breadth.
Of course, UMich's reliability has been in question for a while now…
Finally, if you had any doubt that this survey was utterly biased, here is Hsu's concluding comment:
"While sentiment is currently the highest since August 2025, recent monthly increases have been small – well under the margin of error – and the overall level of sentiment remains very low from a historical perspective."
Translated: don't believe this drop in inflation fears (to 13 month lows) and rise in sentiment (to 6 month highs)… Trump's still OrangeManBad, remember!!
Tyler Durden
Fri, 02/06/2026 – 10:10