Tomorrow, the last interest rate decision under Powell’s chairmanship will be announced, with expectations firmly set on rates remaining unchanged. While this article was being prepared, the US Conference Board Consumer Confidence report was released. This report, crucial for understanding the impact of the ongoing conflict on the economy, will provide insight into what could unfold if the situation continues.
US Consumer Confidence
Despite predictions of 89, the Conference Board Consumer Confidence Index came in at 92.8, surpassing both expectations and last month’s figure of 91.8. Although 12-month inflation expectations eased slightly, the report noted they remain elevated. Notably, it pointed out that the net proportion of consumers anticipating higher interest rates within the next 12 months has reached 50%.
Given that the first definite rate cut has now been pushed to late next year, it’s no surprise that consumer concerns persist. Today, Trump’s message that he could “lift the blockade” holds significant weight. Should the blockade end and the UAE, after leaving OPEC, significantly increase its oil supply, the global inflationary pressure from oil could be alleviated. This move may have been encouraged by the US; however, if other Gulf countries follow, it could be deemed an independent decision.
Since January 2025, the Conference Board Consumer Confidence Index has remained stuck below 100, making the recent partial rebound less meaningful. After reaching a high of 129 in July 2021, the indicator has been on a downward trend for an extended period.
Dana M. Peterson, Chief Economist of the Conference Board, commented on the results as follows:
“Consumer confidence edged up slightly in April but remained largely unchanged overall; this was despite serious concerns about higher gas prices, driven by a sudden surge in Brent crude oil prices amid the war in the Middle East.
Compared to last month, consumers’ assessments of current and expected business conditions showed moderate declines. However, these dips were balanced by minor improvements in labor market perceptions and somewhat more optimistic income expectations in April.”
The Expectations Index, which reflects short-term outlooks for income, employment, and labor market conditions, rose by 1.2 points to 72.2. The preliminary survey results for this month were gathered between April 1 and April 22—a period that included both a two-week ceasefire starting April 8 in the Middle East conflict and a recovery in US stock markets.
Despite the uptick, the overall picture remains one of caution. The index has yet to break above the 100 threshold, a level last seen before the mid-2020s, underlining ongoing uncertainty among consumers.
Looking ahead, the focus shifts to tomorrow’s Federal Reserve decision, which may further influence market sentiment and consumer outlook, especially if there is any surprise in forward guidance.
The cumulative effect of persistent inflation, delayed rate cuts, and geopolitical disruptions continues to cloud the economic outlook. Markets and consumers alike remain attentive to both domestic policy and international developments.
Amid global uncertainty, even small positive data points are met with caution, as seen in today’s conference board figures. The interplay between energy markets and economic forecasts will remain a key driver in the coming months.
