Rising US Household Inflation Expectations Cloud Federal Reserve Outlook Ahead of Policy Decision

U.S. consumer inflation expectations climbed in October, creating potential headwinds for Bitcoin and broader risk assets as the Federal Reserve prepares for its upcoming interest rate decision. According to the final October University of Michigan survey, one-year inflation expectations rose to 4.7% from 4.6% in September, marking the highest level since May. Long-run expectations also edged up to 3.5% from 3.4%, remaining above 2019 and 2024 ranges. Although the headline Consumer Sentiment Index held relatively flat at 48.0, persistent inflation expectations risk prolonging tighter monetary policy and narrowing the scope for interest rate cuts.