Article Image

IPFS News Link • Federal Reserve

Fear of a Fed Error Is on the Rise as American Consumers Pinch Pennies

• Bloomberg

A nudge to the FOMC: 'A bit of courage here'

Consumers have been saying they're exhausted by higher prices for some time.

Now they're actually ratcheting back their spending more materially, as shown in today's May retail sales data. The question for markets is whether this is a welcome pullback that allows the US economy to cool just enough to tame inflation, or a more pernicious trend that hints at deeper weakness.

Gregory Daco of Ernst & Young is worried about the latter, namely, a more material slowdown and the risk that the Federal Reserve is falling behind in cutting interest rates.


PurePatriot