US Consumer Sentiment Rises 16% Amid Easing Tariff Fears

Consumer sentiment in the U.S. saw a significant rebound in June 2025, rising 16% to an index level of 60.5, marking the first increase in six months and the largest monthly gain since early 2024. This improvement, reported by the University of Michigan, reflects easing concerns about inflation and trade tensions, particularly following a temporary truce in the U.S.-China trade dispute and postponement of additional tariffs. Inflation expectations dropped notably, with one-year forecasts falling from 6.6% in May to 5.1% in June, while long-term inflation expectations also edged downward. Despite this optimism, consumer sentiment remains about 20% below December 2024 levels, indicating ongoing caution among Americans who remain wary of future tariff impacts and economic uncertainties. The rebound in sentiment was broad-based across demographics and political affiliations, driven by improved perceptions of current and future business conditions as well as personal finances. While the Trump administration's trade measures have contributed to stabilizing expectations, the cautious optimism suggests that consumer spending may recover moderately, tempered by persistent doubts about trade policy and inflation risks.