February’s preliminary UMich US Consumer Sentiment data exceeded consensus projections across the board. This positive trend was not restricted to assessments of current or future conditions alone; notably, 1-year inflation expectations moderated, falling to 3.5% from the prior 4.0%. Nevertheless, two specific details deserve attention. The uplift in sentiment was driven primarily by households with investments in the stock market. Additionally, long-term inflation expectations for the 5-10 year period crept upward, shifting from 3.3% to 3.4%.

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