Don’t ever bet against the American consumer. That’s how the saying goes, but Chair Jerome Powell at the Federal Reserve continues to take aim at the demand side of the economy. Despite a surge in interest rates that effectively began more than a year ago when the U.S. 2-year Treasury rate began to rise from near zero to above 4.3% by today, the labor market remains strong and excess savings among households is still robust. There have been some signs of consumer weakness as credit card usage is on the rise and pent-up savings balances from the pandemic are beginning to dwindle. Confidence, meanwhile, is lousy to say the least.
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