University of Michigan: Consumer Sentiment Sinks to Record Low of 44.8

US consumer confidence has fallen to its weakest level since the University of Michigan began tracking sentiment in the 1950s. The university's Index of Consumer Sentiment dropped to 44.8 in the final May 2026 reading, down 10% from April's 49.8. April had already broken the prior record low of 50.0, set during the June 2022 inflation surge. Fuel prices are a key driver. Supply disruptions in the Strait of Hormuz have pushed gasoline costs higher, and the impact is hitting households at the pump. In the survey, 57% of respondents cited elevated prices for everyday necessities as a major strain on their financial well-being. Inflation expectations also moved higher. The one-year outlook edged up to 4.8% from 4.7%. The larger shift was in longer-term expectations: the five-year view climbed to 3.9% from 3.5%, signaling consumers increasingly expect inflation to remain persistent. Risk assets, in contrast, have held up. CoinDesk reported on May 11 that both Bitcoin and the Nasdaq rallied even as sentiment slid to record lows, a divergence attributed to institutional flows and innovation-focused capital supporting prices despite weaker household conditions. For investors, the rise in long-term inflation expectations adds policy risk. A move from 3.5% to 3.9% has historically increased the odds of tighter Fed policy. Higher rates raise borrowing costs and often pressure speculative assets such as crypto and growth stocks. Many investors still remember 2022, when aggressive tightening coincided with Bitcoin falling from about $47,000 to below $17,000. The speed of the sentiment decline is also notable: a one-month drop from 49.8 to 44.8. With consumer spending accounting for roughly two-thirds of US GDP, a backdrop in which 57% of households say essential prices are damaging their finances could limit the runway for sustained growth.