Rupture Disguised As Resilience

Beneath the headline data, the U.S. consumer is becoming increasingly dependent on debt to sustain spending, exposing the most fragile side of today’s K-shaped economy.

“Available indicators suggest that economic activity has been expanding at a solid pace […] consumer spending has been resilient…”

— Jay Powell, January 28^th

Well, if the Fed Chairman can be accused of anything, it is focusing on averages and aggregates instead of on the change that is happening at the margin, which is what matters most. Nary a word any time about how the economic spoils are being distributed and the impact this will have on inflation when all is said and done.