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Inflation & The Consumer

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Inflation remains high and persistent (and well above the Fed’s long-term 2% target rate), outpacing wage growth and crimping consumer spending power. The U.S. and other economies face an untested path toward normalization. This is the world’s first recovery from a pandemic in more than 100 years and there is no clear playbook.

Parts of the economy are already in a recession, and the probability is high that the rest of the economy will follow in 2023 given the Fed’s resolve to reduce inflation toward its long-term goal. Almost all past tightening cycles have eventually led to a recession. There remains a risk that the Fed could tap the brakes too hard and force the economy into a deeper-than-expected recession.


What we’re watching

  • Consumer Behavior
  • Pricing Power
  • Inventory
  • Labor
  • Supply Chain Costs
  • Food
  • Energy
  • Semiconductors


Themes 2023 Handboook

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Cowen’s proprietary surveys and data show worsening consumer savings sentiment, increased plans to cut spending, and signs of inflation moderation.