US consumer sentiment fell to 44.8 in May, marking a third consecutive monthly decline and moving just below the previous historic trough from June 2022.
The University of Michigan Surveys of Consumers final May reading dropped from 49.8 in April and 52.2 in May 2025. Current economic conditions fell to 45.8 from 52.5, while the expectations index dropped to 44.1 from 48.1.
High prices remained the main pressure point for households. The survey found that 57% of consumers spontaneously said high prices were eroding their personal finances, up from 50% in April. Lower-income consumers and people without college degrees recorded sharper declines, reflecting greater exposure to gasoline, food and other essential costs.
The latest sentiment drop comes as macro pressure remains a major factor for risk assets. Oil-driven inflation concerns have already been visible across markets, with Brent holding above $113 as traders priced the impact of higher energy costs on inflation, growth and crypto liquidity.
Inflation Expectations Move Higher
One-year inflation expectations rose to 4.8% in May from 4.7% in April. Long-run inflation expectations climbed to 3.9% from 3.5%, moving further above the 2.8% to 3.2% range seen during 2024.
The rise in long-term expectations is especially important because it shows consumers are not only reacting to current price pressure. They are also starting to expect higher inflation to last longer, which can complicate the Federal Reserve’s path if policymakers are waiting for price expectations to cool.
Energy prices were a major part of the decline in sentiment. Supply disruptions linked to the Strait of Hormuz continued to push gasoline costs higher, adding pressure to household budgets and keeping cost-of-living concerns at the center of the survey.
For crypto markets, the data adds another macro signal to watch before the next inflation release and Fed decision. A separate US inflation catalyst report already showed how CPI, rate expectations and risk sentiment can shape Bitcoin flows when traders are positioned for easier policy.
Risk Assets Face Another Macro Headwind
The May sentiment reading does not directly measure crypto demand, but it affects the same liquidity backdrop that drives Bitcoin, Ethereum and higher-risk altcoins. Weak consumer confidence can point to slower spending, while higher inflation expectations can make rate cuts harder to justify.
That combination is uncomfortable for risk assets. Lower sentiment points to pressure on households, while higher expected inflation keeps investors focused on tighter policy and a stronger-for-longer dollar. Crypto often reacts quickly when those forces reduce appetite for leveraged trades and speculative positions.
The Federal Reserve backdrop remains central. Recent coverage around Kevin Warsh taking over the Fed showed why crypto traders still need to separate Bitcoin’s long-term policy narrative from the short-term impact of sticky inflation and delayed rate cuts.
The next key data point is the preliminary June consumer sentiment release scheduled for June 12 at 10 a.m. ET. Until then, May’s 44.8 reading keeps the market focused on household stress, gasoline prices and whether inflation expectations continue moving away from the Fed’s comfort zone.
