Consumers are more upbeat about the here and now, but they expect inflation to rise in the near future.

The Federal Reserve's efforts to stem the rise in prices were given a complication boost on Friday by a crucial report from the University of Michigan that found consumer sentiment had improved in February but inflation expectations had increased.

Preliminary data for February show an increase of 1.5 points to 66.4, with readings for present economic conditions up by 4.2 points to 72.6 and readings for future expectations down by....