US consumer sentiment slides to 48.0 in October, edging close to record low

What Happened

Consumer Sentiment Index slipped to 48.0 in October, the lowest reading in years. The dip follows a modest fall in overall sentiment as price rises tied to the Middle East conflict squeeze household budgets.

Reaction

Independent respondents reported the sharpest drop, while Democrats and Republicans each showed a slight bounce in confidence. At the same time, expectations for inflation rose, signalling worries that prices may keep climbing.

Context

Analysts expect the Federal Reserve to leave interest rates unchanged at its next meeting, given the mixed signals from consumer outlook and inflation forecasts.