US consumer confidence started 2019 at well-above-average levels in a longer-term context, although readings were markedly lower than those which had been typical of most of the previous year. During the rest of 2019, US households maintained historically-high levels of confidence except for two short-lived dives. 2020 started reasonably well but the remainder of the year is expected to be quite different.
The latest survey conducted by the University of Michigan indicates the average confidence level of US households has plunged. The University’s preliminary reading from its Index of Consumer Sentiment registered 71.0 in April, a massive 18.1 points lower than March’s final figure of 89.1.
The University’s Surveys of Consumers chief economist, Richard Curtin, had a warning for households. “Consumers need to be prepared for a longer and deeper recession rather than the now-discredited message that pent-up demand will spark a quick, robust and sustained economic recovery.”
US Treasury bond yields finished a little lower. By the end of the day, the US 2-year Treasury yield had shed 3bps to 0.22%, the 10-year yield lost 4bps to 0.73% and the 30-year yield finished 4bps lower at 1.35%.
Expectations of any change in the federal funds rate over the next 12 months remained negligible. According to end-of-day prices of federal funds futures, the implied probability of the federal funds range changing from 0%-0.25% remained at 0%.[