The debate over is-it-10%-or-20%-of-households-propping-up-consumer-spending is (very!) interesting to me as a macro insider. But either way, the main point for the public is that spending by a minority of affluent/ wealthy households is increasing, while the majority of people are treading water.

This is great, thank you, look forward to reading!

Cool index, is it global or just US? Looking at US sofr/repo vs iorb/fed funds spreads, it looks to me like month-end tightness in money markets exacerbated by the US Treasury running up a big cash balance during the government shutdown (payments delayed, taxes still coming in).

Yes, and core goods were the slice of prices where consumers used to benefit most directly from competition and innovation--the category was flat from 2000 to 2019. So any increase is higher than normal.

"... to another. I thought I had a handle on the future. But the future, it turns out, is not a tote bag."

Lots of Candles, Plenty of Cake

Hasn't fiscal tightening already happened? The deficit is down 17% Y/Y Feb-Aug. The OBBBA is set up to offset that in 2026 and put the deficit back at its 2024 level as % of GDP, timed with the midterms. Unsure about lags between fiscal policy & hiring/layoffs, but that looks like their plan to me.

I don't think we're in a recession. I don't think we're headed into one with the Fed cutting and fiscal policy loosening. But--

The good news: Household balance sheets in aggregate are in better shape than thought, which will help the consumer weather tariffs.

The bad news: The revision is concentrated among the haves. Low & moderate income & middle class Americans will struggle with inflation & benefit cuts from the OBBBA.