For now, Jerome Powell’s Fed continues the squeeze with incessant rate hikes, and 6 out of 10 Americans believe more are coming. Purchasing intentions are shifting and consumers are feeling worse than ever. The NBER has a term for that phenomenon: “recession”, or in other words, a significant decline in economic activity that is spread across the country.
The rate hike cycle has hit markets particularly hard this year, destroying wealth in a huge way. However, AlphaROC highlights less than ⅓ of Americans invest in the stock market directly, so it takes more than a stock market decline to affect purchase intentions. Our data also reveals over 60% own their homes, but this is not where the story ends. Americans used to count on their homes as a rising investment asset, but an increasing number believe their home value will decline, directly impacting the real wealth effect.