Fed:Americans remained financially resilient in 2025, but worries beneath the surface grew
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.
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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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 in assessments of financial wellbeing In 2025 42% of adults said "finding or keeping a job" was either a "minor" or "major concern" vs 37% in 2024 Concerns about price increases eased slightly yet remained most common financial concern among US adults In 2025 26% of adults rated national economy as "good" or "excellent" vs 29% in 2024 and 50% in 2019 before the pandemic In 2025 77% of adults changed behavior in response to higher prices vs 79% in 2024 One-in-four workers said they used generative AI at work in the prior month AI users more likely to expect it to improve their career than replace their jobs The 2025 survey results painted a picture of a US consumer that was still relatively resilient financially, but increasingly uneasy beneath the surface. While 73% of Americans said they were doing OK or living comfortably financially — unchanged from 2024 — confidence in the broader economy remained weak, with only 26% rating the national economy as “good” or “excellent,” down sharply from 50% before the pandemic. Consumers continued to adapt to the cumulative impact of years of inflation, with 77% reporting they had changed spending behavior because of higher prices.
Even though concern about inflation eased slightly, it remained the top financial worry for households. The survey also showed growing fault lines in the labor market and financial wellbeing. The share of adults worried about finding or keeping a job rose to 42% from 37% a year earlier, and lower-income, younger, and Black Americans reported worsening financial conditions.
Meanwhile, the ability to handle emergencies remained stagnant, with only 63% able to cover a $400 emergency expense with cash or equivalent. That suggests many households were stable, but not necessarily strengthening financially despite years of economic expansion. The growing role of AI emerged as a major new theme in 2025.
One in four workers reported using generative AI at work in the prior month, and most users viewed AI as a tool to improve productivity and career prospects rather than a direct threat to employment. That optimism likely reflected the early-stage nature of AI adoption, where efficiency gains were more visible than labor displacement. Looking ahead to 2026 – this was a survey from 2025 – the environment is likely much more challenging.
Higher inflation tied to rising energy prices, war-related supply disruptions, and persistent service inflation could further pressure household budgets and reduce confidence. If geopolitical conflicts persist, consumers may once again face higher gasoline, food, transportation, and utility costs, potentially reversing the modest easing in inflation concerns seen in 2025. At the same time, AI’s impact on employment may be shifting more from from experimentation to implementation.
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