Synopsis:

Goldman Sachs expects the preliminary April reading of the University of Michigan's long-term inflation expectations to increase to 4.3%, marking a further rise from already elevated levels.

Key Points:

• Expectations at Multi-Decade Highs:
  March saw Michigan's long-term inflation expectations reach their highest level since 1993.

• Tariffs Fuel Inflation Anxiety:
  Goldman anticipates that recent tariff announcements will further heighten consumer concerns about inflation in the April survey.

• Survey Distortions Acknowledged:
  While partisan bias and the shift to online data collection may be inflating the readings, Goldman argues that the signal is still meaningful.

• Public Focus on Prices:
  Household inflation expectations remain a relevant barometer—they reflect heightened public attention on how tariffs could impact the cost of living.

Conclusion:

Goldman expects another uptick in inflation expectations in Friday’s report, reinforcing concerns that tariffs are shaping consumer sentiment and may influence future Fed policy.