Consumer Sentiment (UMich) — Impact on Fed Rate Prediction Markets
Falling consumer confidence can become a self-fulfilling prophecy for economic slowdown. The Fed monitors it as a leading indicator of consumption and labor demand.
+/-
per 1σ surprise
↑ Hawkish
when high vs consensus
Pre-calibration
data points
Release Schedule
Frequency
Monthly
Release time
10:00 AM ET
Delay
Preliminary: ~10 days into month
FRED series
UMCSENT
Historical Releases
Data populates automatically once the FRED ingest pipeline is running.
How Consumer Sentiment (UMich) Moves Fed Rate Prediction Markets
University of Michigan Consumer Sentiment Index — a gauge of household confidence.
Falling consumer confidence can become a self-fulfilling prophecy for economic slowdown. The Fed monitors it as a leading indicator of consumption and labor demand.
The Bayesian Sensitivity Model
The model calibrates a sensitivity coefficient for each indicator: how many percentage points the cut probability at the next FOMC meeting moves per standard deviation of surprise. For Consumer Sentiment, the preliminary coefficient is ±+/- 1–3pp on cut probability. This means ifConsumer Sentiment comes in 1 standard deviation above consensus (hawkish surprise), the model reduces cut probability by approximately +/- 1–3pp on cut probability.
These coefficients are preliminary until calibrated from at least 20 historical observations of Kalshi price reactions to each release. The calibration uses a regression of (surprise_zscore × sensitivity_coefficient) against observed Kalshi probability changes, cross-validated against CME FedWatch data going back to 2015.
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