Consumers at breaking point as Fed inflation battle heats up: Boockvar

Read Time:1 Minute, 45 Second


The economy may be hitting a crucial turning point.

Investor Peter Boockvar warns the Federal Reserve will not be able to meaningfully contain surging inflation, and there’s not much more consumers can withstand.

“It gets to the question: At what point does the consumer blink in the face of these rising prices,” the Bleakley Advisory Group CIO told CNBC’s “Fast Money” on Wednesday. “On the low-end consumer, they’re already beginning to blink.”

A TransUnion study out this week reflects trouble among consumers with the “riskiest credit profiles” in the form of rising trend credit balances and delinquency rates.

Boockvar believes the report is a harbinger of what’s ahead. In a note out this week, he warned consumers are at a “fork in the road.”

“The consumer is going to call a timeout on spending because of the continued rise in prices,” he wrote. “It is inevitable as price matters to the US consumer who loves discounts.”

Boockvar, a Fed critic, believes all income levels are at a breaking point. He warns they’re on the cusp of delaying purchases until prices cool — which would have painful consequences on the broader economy. It would put Fed Chair Jerome Powell’s view that it’s possible to avert a recession at risk.

“This is going to be the most aggressive tightening cycle in 40-plus years between the rate hikes and the shrinking of the balance sheet,” noted Boockvar, a CNBC contributor. “Considering how dependent economic activity is to cheap money, how dependent markets have been to cheap money, I don’t see how it’s possible to achieve a soft landing.”

Yet, Wall Street appeared to embrace the Fed’s half point rate hike and Powell news conference. The S&P 500 saw its best day since May 2020.

Boockvar expects the bounce to evaporate.

“If there are low odds of a soft landing, which means we’re going to have a recession, well that means that earnings numbers are going to have to come down,” Boockvar said.

Disclaimer


Do you like money and finances? I invite you to go to finance news

Happy
Happy
0 %
Sad
Sad
0 %
Excited
Excited
0 %
Sleepy
Sleepy
0 %
Angry
Angry
0 %
Surprise
Surprise
0 %
We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners. View more
Cookies settings
Accept
Privacy & Cookie policy
Privacy & Cookies policy
Cookie name Active

Who we are

Suggested text: Our website address is: https://updatednews24.com.

Comments

Suggested text: When visitors leave comments on the site we collect the data shown in the comments form, and also the visitor’s IP address and browser user agent string to help spam detection. An anonymized string created from your email address (also called a hash) may be provided to the Gravatar service to see if you are using it. The Gravatar service privacy policy is available here: https://automattic.com/privacy/. After approval of your comment, your profile picture is visible to the public in the context of your comment.

Media

Suggested text: If you upload images to the website, you should avoid uploading images with embedded location data (EXIF GPS) included. Visitors to the website can download and extract any location data from images on the website.

Cookies

Suggested text: If you leave a comment on our site you may opt-in to saving your name, email address and website in cookies. These are for your convenience so that you do not have to fill in your details again when you leave another comment. These cookies will last for one year. If you visit our login page, we will set a temporary cookie to determine if your browser accepts cookies. This cookie contains no personal data and is discarded when you close your browser. When you log in, we will also set up several cookies to save your login information and your screen display choices. Login cookies last for two days, and screen options cookies last for a year. If you select "Remember Me", your login will persist for two weeks. If you log out of your account, the login cookies will be removed. If you edit or publish an article, an additional cookie will be saved in your browser. This cookie includes no personal data and simply indicates the post ID of the article you just edited. It expires after 1 day.

Embedded content from other websites

Suggested text: Articles on this site may include embedded content (e.g. videos, images, articles, etc.). Embedded content from other websites behaves in the exact same way as if the visitor has visited the other website. These websites may collect data about you, use cookies, embed additional third-party tracking, and monitor your interaction with that embedded content, including tracking your interaction with the embedded content if you have an account and are logged in to that website.

Who we share your data with

Suggested text: If you request a password reset, your IP address will be included in the reset email.

How long we retain your data

Suggested text: If you leave a comment, the comment and its metadata are retained indefinitely. This is so we can recognize and approve any follow-up comments automatically instead of holding them in a moderation queue. For users that register on our website (if any), we also store the personal information they provide in their user profile. All users can see, edit, or delete their personal information at any time (except they cannot change their username). Website administrators can also see and edit that information.

What rights you have over your data

Suggested text: If you have an account on this site, or have left comments, you can request to receive an exported file of the personal data we hold about you, including any data you have provided to us. You can also request that we erase any personal data we hold about you. This does not include any data we are obliged to keep for administrative, legal, or security purposes.

Where we send your data

Suggested text: Visitor comments may be checked through an automated spam detection service.
Save settings
Cookies settings