Americans are feeling upbeat about inflation and the economy, according to the University of Michigan's latest consumer survey released Friday.

The university's preliminary reading for June showed that consumer sentiment rose 8% from the prior month, "reflecting greater optimism as inflation eased and policymakers resolved the debt ceiling crisis," according to a release. Sentiment is at its highest level in four months.

Consumers' inflation expectations for the year ahead retreated for the second straight month, declining to 3.3% early this month from 4.2% in May.

Sentiment surveys are closely watched by the Federal Reserve to gauge the expectations consumers and businesses have for price hikes. Fed Chair Jerome Powell said Wednesday that inflation expectations remain in check.

"Despite elevated inflation, longer-term inflation expectations appear to remain well anchored, as reflected in a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets," he said in a news conference following the central bank's June monetary policy meeting.

This story is developing and will be updated.