US: Consumer sentiment brought some relief for Fed - TDS

TD Securities analysts note that the data released on Friday showed that the US consumer sentiment improved marginally in July, rising to 98.4 from 98.2 before.

Key Quotes

“The gain was entirely the result of an improvement in the expectations component, which more than offset a modest decline in the current conditions component. More important to the Fed, inflation expectations for the 5-10y horizon jumped to the top end of the recent range (since mid 2016) at 2.6% while 1y expectations ticked down a tenth to 2.6% in July.”

“This is a one-month development so we wouldn't read too much into it (we will also get the final read in a couple of weeks) but this would surely bring some relief to some Fed officials for now.”