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Blake, Wm. Every Man Also Gave Him a Piece of Money. 1805.

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The University of Michigan's consumer sentiment index rose to 78.8 in January, marking the highest level since July 2021.

Year-ahead inflation expectations also decreased to 2.9%, the lowest since December 2020, indicating an improving inflation outlook. Both Democrat and Republican consumers showed increased optimism about the economy.

Sam Millette, director of fixed income for Commonwealth Financial Network: “The improvement was widespread, as consumer views on current economic conditions and expectations for the future both improved notably during the month. Encouragingly for the Federal Reserve consumer inflation expectations fell in January, with one-year inflation expectations falling to a three-year low in January.”

Despite the positive consumer sentiment, strategists warn of potential risks such as a rebound in inflation, geopolitical turmoil, and rising U.S. debt.