Claudia Sahm
@claudia-sahm.bsky.social
macro, fiscal, Fed. creator of the Sahm rule recession indicator. Stay-At-Home Macro (SAHM) Substack.
Just because Fed policy is contributing to the bifurcation in the economy is not a reason to cut rates. Inflation remains above the Fed’s target. But slower growth at the bottom suggests that policy is still restrictive. It’s also a reason to be optimistic about more breadth as the Fed lowers rates.
November 5, 2025 at 6:56 PM
Just because Fed policy is contributing to the bifurcation in the economy is not a reason to cut rates. Inflation remains above the Fed’s target. But slower growth at the bottom suggests that policy is still restrictive. It’s also a reason to be optimistic about more breadth as the Fed lowers rates.
The Fed’s goal has been to restrict overall demand to reduce overall inflation. Still, the pullback in demand is concentrated among households whose spending was already constrained, pulling down the bottom arm of the K. That's also true among businesses, as the piece discusses.
November 5, 2025 at 6:48 PM
The Fed’s goal has been to restrict overall demand to reduce overall inflation. Still, the pullback in demand is concentrated among households whose spending was already constrained, pulling down the bottom arm of the K. That's also true among businesses, as the piece discusses.
Another study found that a 1 pp increase in the rate reduced overall card spending by 9%. But that was driven by account holders who carry a balance or have low credit scores. Spending by those who pay off their balance or have high credit scores was unaffected. www.bostonfed.org/publications...
The Credit Card Spending Channel of Monetary Policy: Micro Evidence from Account-level Data
www.bostonfed.org
November 5, 2025 at 6:40 PM
Another study found that a 1 pp increase in the rate reduced overall card spending by 9%. But that was driven by account holders who carry a balance or have low credit scores. Spending by those who pay off their balance or have high credit scores was unaffected. www.bostonfed.org/publications...
Credit-card interest rates, which are short-term, move closely with the federal funds rate, so it’s a reasonable place to look for the effects of monetary policy.
November 5, 2025 at 6:29 PM
Credit-card interest rates, which are short-term, move closely with the federal funds rate, so it’s a reasonable place to look for the effects of monetary policy.
An analysis of credit card usage at the Boston Fed showed that after 2022 — the year when the Fed hiked rates — inflation-adjusted spending by low-income consumers has flatlined. Higher-income consumers have driven the growth in real spending with credit cards. www.bostonfed.org/publications...
November 5, 2025 at 6:28 PM
An analysis of credit card usage at the Boston Fed showed that after 2022 — the year when the Fed hiked rates — inflation-adjusted spending by low-income consumers has flatlined. Higher-income consumers have driven the growth in real spending with credit cards. www.bostonfed.org/publications...
Being grateful and grumpy is perfectly understandable (and relatable). Wonderful that you are cancer free again. And yes, good point about benefiting from the advances in treatments.
October 20, 2025 at 6:31 PM
Being grateful and grumpy is perfectly understandable (and relatable). Wonderful that you are cancer free again. And yes, good point about benefiting from the advances in treatments.
Zandi must be using the distributional financial accounts which are like a quarterly version of the SCF. www.federalreserve.gov/releases/z1/...
The Fed - Distributional Financial Accounts Overview
The Federal Reserve Board of Governors in Washington DC.
www.federalreserve.gov
October 15, 2025 at 3:53 PM
Zandi must be using the distributional financial accounts which are like a quarterly version of the SCF. www.federalreserve.gov/releases/z1/...
The BLS/BEA estimates of consumer spending by income are much less skewed toward the highest income than the Moody's estimate. www.bea.gov/data/special.... Still skewed. While series is shorter, 2004-2022, the upward drift in top share is less clear.
October 15, 2025 at 3:42 PM
The BLS/BEA estimates of consumer spending by income are much less skewed toward the highest income than the Moody's estimate. www.bea.gov/data/special.... Still skewed. While series is shorter, 2004-2022, the upward drift in top share is less clear.
It’s a good reason not to hold up the cola. Nice to hear.
October 9, 2025 at 9:36 PM
It’s a good reason not to hold up the cola. Nice to hear.
Any word on the collection for October CPI? Delay in publishing estimates is a problem; missing the data to do an estimate is an even bigger one.
October 9, 2025 at 9:33 PM
Any word on the collection for October CPI? Delay in publishing estimates is a problem; missing the data to do an estimate is an even bigger one.
They get the ADP micro data and estimate their own series.
October 3, 2025 at 2:34 AM
They get the ADP micro data and estimate their own series.