A key indicator reflecting U.S. consumer sentiment hit another historic low in May. On the 22nd, the same day Kevin Warsh was sworn in as the new Federal Reserve Chair, the University of Michigan's consumer confidence survey report revealed concerning inflation expectations. U.S. magazine Fortune commented on the 23rd that this is a "major red flag" for the Federal Reserve.

The latest data released by the University of Michigan on the 22nd shows that the U.S. consumer confidence index for May fell to 44.8, breaking below the previous record low of 49.8 set just in April and marking a new all-time low. At the same time, U.S. consumers' concerns about future inflation have intensified further. The one-year inflation expectation rose from 4.7% to 4.8%, while the five-year inflation expectation jumped significantly from 3.5% to 3.9%, both returning to the high levels seen in the second half of last year when tariff policies were exerting pressure.

Joanne Hsu, director of the survey project, stated in a release: "U.S. consumer confidence has declined for the third consecutive month as supply disruptions in the Strait of Hormuz continue to push gasoline prices higher." She added: "The key issue is that consumers are not only worried that inflation will continue to intensify but also fear it will spread beyond fuel and persist for an extended period." According to CNN, the University of Michigan's consumer confidence survey began in 1952. Data indicates that current American confidence is even lower than during periods such as the "oil crisis," the 9/11 attacks, the Great Recession, the pandemic, and the subsequent surge in inflation.

Reportedly, 57% of respondents voluntarily mentioned that high prices are eroding their personal financial conditions. Since the outbreak of conflict in the Middle East at the end of February, the national average retail gasoline price has surged by over 50%, reaching a historic high of $4.5 per gallon.

The Federal Reserve is closely monitoring consumers' expectations for the pace of future price increases. If people believe prices will only continue to rise, they may increase spending now and demand higher wages; meanwhile, businesses may raise goods prices in response to higher consumer demand and labor costs—thereby pushing inflation higher.

Federal Reserve Governor Waller recently stated in a speech: "Although measures of long-term inflation expectations remain at relatively low levels, some expectations for inflation over the next one to five years have shifted upward since early 2026, which concerns me."

Despite the pessimistic sentiment in consumer confidence, the U.S. stock market continues to reach new highs. Regarding this, Christopher Rupkey, chief economist at FwdBonds, believes: "The stock market repeatedly hitting new highs offers no help in boosting consumer confidence, indicating that most Americans' funds are locked in retirement accounts and cannot be withdrawn to improve their current living situations."