Fed:Americans remained financially resilient in 2025, but worries beneath the surface grew
At a Glance
The desk sees a growing fragility in U.S. consumer confidence as financial resilience is tested by underlying economic pressures. Per the full note from Greg Michalowski at investinglive.com, while 73% of Americans reported feeling financially stable in 2025, concerns about job security and inflation are rising, particularly among vulnerable demographic groups. This suggests that despite a seemingly stable financial picture, deeper issues could impact consumer spending and economic sentiment moving forward. The consensus target for the USD remains at 1.075, with potential volatility as inflation and geopolitical tensions evolve.
Full Analysis
What the desk is arguing
The desk argues that while consumer sentiment appears stable, significant underlying concerns threaten this facade of resilience. Per the full note, 42% of adults expressed worry about job security, up from 37% in 2024, indicating a growing anxiety that could dampen future spending.
Moreover, inflation remains a primary concern, with 77% of respondents altering their spending habits due to price increases. This persistent pressure, coupled with stagnant emergency savings levels, suggests that many households are not strengthening financially despite years of economic growth.
Where it sits in our coverage
Our consensus target for the USD is 1.075, with a range from 1.04 to 1.12. Notable firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This view aligns with jpmorgan, which sees a stronger dollar, while bofa presents a more cautious outlook at the lower end of the range.
How other firms see it
Firms like jpmorgan and citi are aligned in their outlook, anticipating a stronger dollar based on economic resilience. In contrast, bofa holds a contrary view, expecting downward pressure on the dollar.
Key indicators to watch include U.S. inflation data and employment figures, as these will provide insights into consumer behavior and economic health moving forward.
What the calendar says
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From the original
In 2025 73% of Americans said doing OK or comfortably financially, unchanged from 2024 In 2025 63% said could cover over $400 emergency with cash or equivalent, unchanged from 2024 Certain demographic groups, including low-income, young, and Black adults, saw meaningful declines
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Per the full note from UBS, the US consumer remains resilient in July due to middle-income buffers, but political polarization is distorting spending patterns on durables. This keeps consumption the key driver for the economy and the Fed's rate path, though Governor Waller's focus on employment risks adds a dovish tilt. With no specific currency targets from internal coverage, the commentary underscores USD vulnerability if consumer data softens, while consensus broadly expects gradual Fed cuts.