Consumer confidence figures out of the US paint an interesting picture for risk appetite heading into the new year. Michigan's sentiment gauge jumped to 54.0 last month—its strongest reading since September 2025—yet the number still lags nearly 25% compared to where it stood twelve months back. That gap suggests caution remains embedded in household psyche despite the recent bounce. The inflation story tells a different tale though. Near-term price expectations have compressed to 4.2%, marking the lowest level since early 2025, which signals fading pressure on immediate purchasing power. That's the kind of data point that typically loosens monetary policy constraints and fuels appetite for risk assets. Meanwhile, longer-duration inflation forecasts ticked slightly higher, hinting at lingering doubts about sustained disinflation. For traders watching macro flows, this disconnect between weakening confidence and cooling near-term inflation reads as a mixed signal—one that could swing either way depending on what economic prints follow.