The Impact of the Fed Pivot on Consumers

Apollo Chief Economist

Data covering the period after the Fed pivot shows that US consumers significantly changed their expectations to interest rates after the December FOMC meeting. Specifically, the share of consumers expecting interest rates to go down jumped to levels last seen during the pandemic and during the financial crisis in 2008, see chart below. With almost 30% of households expecting interest rates to go down, it would make sense if consumers now start borrowing and spending at a faster pace.

Quantifying the impact of the Fed pivot on US consumers
Source: U. of Michigan Survey, Haver Analytics, Apollo Chief Economist

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