What Happened to Consumer Confidence? | Episode 70 | 11-10-23
A concern that many Americans may be grappling with is how our household incomes can keep pace with inflation—A question that was reflected in the recent University of Michigan Consumer Sentiment Index. The index reported a slip in consumer confidence, marking a concerning trend that Megan Horneman discusses in detail. She explains the implications of this decline, including the unsettling sentiment that now may not be the best time to make a major purchase, like a house or big-ticket household items.
The recent Consumer Confidence report included high-interest rates on loans – from credit cards to mortgages and auto loans. These interest rates are shaping consumer sentiment and the rising inflation expectations–highest since 2011–might just be the red flag for the Federal Reserve. The Fed intends to keep interest rates elevated for an extended period. How might climbing inflation expectations impact their decisions in the upcoming December meeting?
