Consumer Sentiment Sits Near Record Lows as Inflation Expectations Edge Up

Americans remain deeply gloomy about the economy, and they expect prices to keep climbing, according to fresh data released Friday.

What the reports showed

The University of Michigan's consumer sentiment index finished October at 48, a hair below September's 48.1 and about 10.4% lower than a year ago, CNBC reported. The Wall Street Journal noted it is the second-lowest reading in the survey's history and the weakest ever recorded heading into a major U.S. election. Shoppers' one-year inflation outlook rose to 4.7% and their five-year outlook to 3.5%.

A separate S&P Global survey showed manufacturing activity running hotter than forecast, with the purchasing managers' index at 56, its highest in 53 months, according to CNBC.

The Fed angle

The Federal Reserve meets next week. Markets expect it to leave its benchmark rate at 3.75% to 4.00%, but futures priced roughly a 70% chance of a quarter-point hike in December, per the CME FedWatch tool cited by CNBC. The 10-year Treasury yield was around 4.99% Friday after slipping below 5% this week as investors sought safety from a tech-stock sell-off.

Why it matters for crypto

Rising inflation expectations and strong factory data both give the Fed reasons to keep policy tight, and higher rates tend to weigh on speculative assets like bitcoin. On the other hand, a weak consumer mood could push officials toward caution. Crypto traders are likely to treat next week's Fed statement as the main event.