  We study the role of spin correlations in nonlinear absorption due to optical
transitions from a deep impurity level to states above a Fermi sea. We
demonstrate that the Hubbard repulsion between two electrons occupying the
impurity state leads to a logarithmic divergence of the third-order nonlinear
optical susceptibility at the absorption threshold. This divergence is a
manifestation of the Kondo physics in the nonlinear optical response of Fermi
sea systems. Remarkably, the light-induced Kondo temperature, which governs the
shape of the Kondo-absorption spectrum, can be tuned by varying the intensity
and frequency of the pump optical field. We also show that, for off-resonant
pump excitation, the pump-probe spectrum exhibits a narrow peak below the
linear absorption onset.
