The latest data illustrate how American households — supported by a strong labor market and rising wages — are so far buttressing the economy against recession in the face of high interest rates. Too much strength, however, could force the Federal Reserve to pursue more aggressive policy should inflationary pressures prove sticky. 

“This will boost optimism that because of the resilience of the consumer we can achieve that soft landing,” Lindsey Piegza, chief economist at Stifel Financial Corp., said on Bloomberg Television. At the same time, “this simply means the Fed will have to be more aggressive raising rates higher and keeping rates higher for longer,” she said.

Eoin Treacy's view

This is another example of how the excess liquidity in the economy has not yet been burned off. That is going to put further pressure on the Fed to continue to tighten and suggests the soft landing hype needs to find more data points to support the argument.


The Nasdaq-100 reversed yesterday’s rebound and the S&P500 closed below the 50-day MA. A clear upward dynamic will be required to check potential for a deeper reaction.