December final UMich consumer sentiment 52.9 vs 53.4 expected

• Prelim was 53.3
• Prior was 51.0
• Conditions 50.4 vs 50.7 prelim
• Expectations 54.6 vs 55.0 prelim
• 10year inflation 4.2% vs 4.1% prelim (prior was 4.5%)
• 5-year inflation 3.2% vs 3.2% prelim (prior was 3.4%)

In the preliminary report, the big surprise was the drop in inflation expectations. Now that tends to correlate with gasoline prices so I’d take it with a grain of salt but the Fed will see it as validation for cutting rates, particularly when combined with the softer CPI report this week.

All that said, the market is seeing just a 20% chance of a January rate cut and just over 50% for March.

This article was written by Adam Button at investinglive.com.