Cracks in the Consumer Engine: Why the Fed Must Cut Rates Now
In this episode, we unpack the sudden cooling of American consumer spending and what it signals for the broader economy. As tax refund momentum fades and July retail sales contract, underlying demand softness is laid bare. We examine the psychological shift in the labor market—where stagnant hiring is driving precautionary saving despite low layoffs—and deconstruct the divergence between core PCE and softer CPI metrics. Finally, we analyze Citigroup's case for imminent Federal Reserve rate cuts, exploring how data-dependent policy must respond to diminishing inflation and a decelerating…
The skinny
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