U.S. JUN Michigan 5 Year Inflation Expectations Final Actual 3.60, Previous 4.00.

U.S. JUN Michigan 5 Year Inflation Expectations Final Actual 3.60, Previous 4.00.

Michigan's inflation expectations have continued to decline, reflecting broader economic shifts and policy changes. According to the University of Michigan's survey, year-ahead inflation expectations inched lower to 4.4% in July 2025, down from 5% in June. This marks the second consecutive month of decline from the 23-year high of 6.6% reached in May [1].

The drop in expectations is attributed to the easing of concerns surrounding higher import costs, which had been a significant factor in driving up consumer inflation. This was partly due to US President Trump's retreat from aggressive tariff threats on major trading partners [1].

Consistently, the five-year outlook fell for a third straight month to 3.6%, indicating a more subdued expectation for long-term inflation. This aligns with the Federal Reserve's efforts to manage inflation through monetary policy adjustments [4].

Meanwhile, health insurance premiums in Michigan are set to rise significantly in 2026. The Michigan Department of Insurance and Financial Services reports that health insurance plans covering nearly 950,000 Michiganders are seeking regulators' approval for double-digit rate increases. The proposed premium increases would average 16.8% for individual plans and 11.1% for small group plans [3].

Blue Cross Blue Shield of Michigan, the state's largest insurer, has requested increases of 18.2% for individual plans and 11.2% for small group plans. The proposed rate hikes are attributed to higher utilization of healthcare services and "skyrocketing" pharmacy costs [3].

The expiration of expanded Healthcare.gov subsidies at the end of 2025 will exacerbate the impact of rising premiums for individual market plans, particularly for low and middle-income earners. These subsidies, which began in 2021, expanded eligibility for Affordable Care Act tax credits and capped premium payments for a silver plan at 8.5% of income [3].

Investors and financial professionals should monitor these developments closely, as they reflect broader trends in inflation and healthcare costs. The decline in inflation expectations indicates a potential shift in economic policy, while the proposed rate hikes in health insurance premiums highlight the ongoing challenge of managing healthcare costs.

References:
[1] https://tradingeconomics.com/united-states/michigan-inflation-expectations/news/471273
[2] https://www.tradingview.com/news/te_news:471273:0-us-1-year-inflation-expectations-ease-further/
[3] https://www.freep.com/story/money/business/michigan/2025/07/15/michigan-health-insurers-seek-more-double-digit-rate-hikes/85192789007/
[4] https://fred.stlouisfed.org/series/EXPINF5YR