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Investing Specialists

Consumers Feeling the Pain of Lower Incomes

Real disposable income growth is down considerably from a year ago, potentially providing less firepower for consumption growth ahead.

U.S equity markets did well this week, gaining about 0.7%. Most of the week's upside action occurred around President Trump's mid-week address to Congress, which sounded both more hopeful and presidential. But details were still lacking.

Markets, also in a change of pace, liked a more hawkish Fed based on recent speeches by several Fed members over the past week. A more tightfisted Fed suggested that the economy was even stronger than the market already believed, which is why the equity markets, not the bond markets, reacted so positively to a potential Fed rate increase in March. The odds of a March Fed rate increase, based on interest rate futures, were close to zero two weeks ago, then hit the mid-20s last week, and rose to over 60% this week.