Institution: Consumer Confidence Constitutes Economic Risk

ChainCatcher news, John Velis, a strategist at Mellon Bank, stated that the decline in the University of Michigan Consumer Confidence Index is "disheartening." He noted that the rise in long-term inflation expectations is particularly concerning, as long-term inflation expectations had previously remained relatively stable. With consumer confidence wavering, weakened demand may begin to manifest in the real economy, a phenomenon that has already appeared in some sectors such as air travel. According to inflation data released this week, air travel prices fell in February. Regarding the consumer confidence survey, Velis said, "A lot of cyclical evidence suggests that these indicators are not very good predictors, but you cannot ignore the overall decline and the reasons behind it."