17 August 2023
US households’ excess savings from the pandemic era are anticipated to run out this quarter, warns the Federal Reserve Bank of San Francisco, potentially diminishing a major propellant of the US economy amidst rising inflation. Earlier research estimated $500 billion in excess savings as of March 2023. However, updated figures show less than $190 billion by June. This decline, combined with growing spending, lowered income data, and inflationary pressures, hints at economic headwinds, especially as the Fed continues its aggressive interest rate hikes.