US Consumer Confidence Rises Amid Improved Inflation Outlook

US Consumer Confidence Rises Amid Improved Inflation Outlook

US consumer confidence saw an improvement in July 2025 as recorded by the University of Michigan , with inflation expectations easing further.

The rise in US consumer confidence reflects a significant economic shift that could influence Federal Reserve policy and market investments.

The University of Michigan reported an increase in its Consumer Sentiment Index to 61.8 in July 2025, following a slight rise from June. Improved sentiment was matched by falling inflation expectations for the second consecutive month, as noted by University of Michigan Surveys of Consumers led by Joanne Hsu.

“Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example, if trade policy stabilizes for the foreseeable future. At this time, the interviews reveal little evidence that other policy developments, including the recent passage of the tax and spending bill, moved the needle much on consumer sentiment.” — Joanne Hsu, Director, Surveys of Consumers, University of Michigan

The improved economic outlook stems from expectations of stable trade policies and less pronounced inflation risks. While immediate movements in crypto markets such as BTC and ETH were not directly attributed to this sentiment shift, historically, lower inflation risk can favor risk assets.

Institutional and market reflections have shown no immediate major reallocations; nonetheless, reduced inflation risks may lead to a subdued likelihood of aggressive Federal Reserve actions, encouraging investment in risk assets. Crypto markets often respond more to unexpected economic data shifts, yet the reduction in inflation risk is a positive signal.

Financial markets have shown resilience, though experts caution that any substantial market changes would likely connect to broader macroeconomic stability. The latest data reflects a pattern where consumer sentiment improvements lead to incremental but significant changes in investment strategies across various markets. Historical precedents confirm such trends often benefit risk-sensitive sectors, including cryptocurrencies.