Part 6/6:
Every time the Federal Reserve heralds the resilience of consumer spending, it is essential to consider the full context. The current strength is largely driven by debt accumulation, not sustainable income growth. As interest rates continue to rise, the burden of variable-rate debt will increase, potentially leading to higher delinquencies and further lending restrictions.
In essence, the rosy picture of resilient consumer spending may overlook the fragile financial footing many Americans now find themselves on. Recognizing these underlying pressures is critical for understanding the true direction of the U.S. economy in the months ahead.