US consumer sentiment improved for a second month in early July, with the University of Michigan’s preliminary index rising to 61.8 from 60.7 in June, the highest reading since February and above the 61.5 consensus. The sub-index of current economic conditions advanced to 66.8, while the expectations gauge edged up to 58.6, both outperforming analyst forecasts. Inflation expectations in the same survey eased sharply. Households now anticipate prices will increase 4.4% over the next year, down from 5.0% in June, and see five-to-ten-year inflation running at 3.6%, compared with 4.0% previously. The back-to-back declines put both measures at their lowest levels since February, signaling that the spring tariff-related bump in price worries is fading. The Michigan figures follow the New York Federal Reserve’s June Survey of Consumer Expectations released on 8 July, which showed the median one-year inflation outlook slipping to 3.0%—its lowest since early 2024—while three- and five-year expectations held at 3.0% and 2.6%, respectively. Taken together, the surveys suggest consumer price views remain broadly anchored even as overall sentiment recovers. Despite the latest uptick, the headline sentiment index is still about 16% below its December 2024 level and remains well under its long-run average, underscoring continued caution among households. The fall in inflation expectations, however, could give Federal Reserve officials additional comfort that longer-term price pressures are cooling as they assess the outlook for interest rates.