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What the Fed Worries About When Households Get Nervous
Description
On this episode of The Federal Reserve Podcast with Fexingo, Lucas and Luna break down the New York Fed's latest Survey of Consumer Expectations, which shows household financial worries at their highest since July 2022. They connect the anxiety to the consumer spending data the Fed is watching—and why even strong jobs numbers may not be enough to keep confidence from cracking. Lucas explains the concept of 'precautionary saving' and why a sudden pullback in spending is the one risk that could make the Fed cut rates faster than anyone expects. The conversation is grounded in the latest 10-year breakeven inflation rate of 2.36 percent and the Fed funds rate at 3.63 percent. A tight, specific look at the soft data the FOMC is now reading alongside the hard numbers.