Good morning! We have a data-packed edition for you today, full of charts about how everyday people feel about inflation, household finances, and the economy.

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Macro vs. micro outlooks

Everyday Americans are getting more confident that inflation is cooling off, but they don’t necessarily expect their personal financial situation to improve in the same way. 

That’s according to the New York Fed’s latest Survey of Consumer Expectations.

Published Monday, the report illustrates how optimism for the US economy as a whole does not require the same hope for one’s personal standing within it. 

In short, the macro and micro narratives are diverging. 

What drew most of the headlines Monday was how consumers’ median three-year inflation expectations hit their lowest level on record dating back more than a decade, at 2.3%.

So, as much as pundits this month have questioned the Federal Reserve’s policy choices, consumers at least seem to feel upbeat about where inflation is headed.

On Wednesday, July CPI is seen rising 3.0% year-over-year, which remains above the Fed’s stated goal of 2.0%, according to MorningStar estimates.

However, even as consumers see prices cooling across the board — including for things like gas and groceries — the share of survey respondents that described their household financial situations improving went down in July compared to June.

The share of respondents who see their situation getting worse, in turn, climbed. 

Those who expect their lot to get “somewhat worse” or “much worse” increased from 21.2% in June to 23.5% in July. 

Respondents also said they expect household spending growth to hit 4.9% in the year ahead.

That’s the lowest reading since April 2021 and well below the peak of 9.0% reported in May 2022. 

Forecasts for household income growth held steady at 3.0% in July. It’s fluctuated between 2.9% and 3.3% since January 2023.

Notably, consumer expectations for going delinquent on their debt in the next three months hit their highest level since the start of the pandemic.

To be clear, this Fed survey is not a hard-and-fast gauge for how all Americans are feeling. I’d argue it’s not any more valuable than a sentiment tracker based on Reddit data.

No data in a vacuum is that helpful, but when you look at it compared to the last month, year, and decade, it paints an interesting picture.

Then again, here’s what UBS economist Paul Donovan had to say about the survey before it published: 

“Registered Republicans will declare inflation is mimicking that of Weimar Germany. Registered Democrats will deny inflation exists.”

In one year from today, what do you expect for your personal financial situation?

A) Better off

B) Worse off

Hit reply to this email or let me know on X @philrosenn.

Elsewhere:

❌ Trump’s social media stock tumbled. The former president made a hotly anticipated return to X, formerly Twitter, to have a live interview with Elon Musk. Shares of Trump Media & Technology Group fell 5% in trading Monday but saw a slight uptick in overnight trading. On Friday, the company reported a quarterly loss of $16.4 million. (Yahoo Finance)

💻️ Elon Musk and Trump’s interview started late. Musk tweeted shortly after the live event was slated to begin that a cyberattack had delayed the conversation. More than one million people tuned in as Musk and Trump discussed policy, tech, immigration and more. (CNBC)

📈 Japanese stocks are moving up. Asia-Pacific markets trended higher early Tuesday following last week’s chaotic trading. The benchmark Nikkei 225 climbed more than 2.2% and breached 36,000 for the first time since August 2, pulled higher by momentum from domestic tech stocks. (Bloomberg)

Rapid-fire:

• A Japan-focused stock ETF that hedges out yen volatility saw $400 million in outflows last week (Bloomberg)

• Israel put its military on high alert as the US sends assets to the Middle East in preparation for a potential attack from Iran and Hezbollah (WSJ)

• Expedia’s CEO says the travel slowdown is real as consumers pull back on spending (Yahoo Finance)

• Chinese authorities are going to extreme lengths to tighten their grip on their domestic bond market, the third-largest in the world (Bloomberg)

• Multiple staffers at Bank of America have had serious health issues, and one associate died in May amid reports of extreme work hours and demands (WSJ)

Last thing:

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