America's economic anxiety

[WendyBG]

There’s so much data in this article that I’m posting a gift link. But I will post snips as usual.

https://www.wsj.com/economy/americas-economic-anxiety-is-rising-up-the-income-ladder-d77b97d4?st=tf38vz&reflink=desktopwebshare_permalink

America’s Economic Anxiety Is Rising Up the Income Ladder

A Wall Street Journal poll finds that even the wealthiest worry about financial security for themselves and their children

By Aaron Zitner, The Wall Street Journal, June 19, 2026

…
More than 40% of Americans who call themselves upper class or upper-middle class say they haven’t saved enough money to retire comfortably. Only about 40% say their financial security is where they thought it would be at this point in their lives. Nearly three in five say they are strained by high gasoline prices.

Those in the wealthiest classes have lost faith that an economy that has benefited them can lift future generations…

While middle- and working-class Americans signaled the most economic strain, the pessimism felt by the upper classes stood out for having worsened, despite the ways the economy has favored them. Nearly two-thirds of people who consider themselves upper class or upper-middle class have $150,000 or more in annual household income, including 25% with incomes above $250,000…

Rising gasoline prices have erased more than a year of Americans’ wage gains, and anxiety is rising among white-collar workers that artificial intelligence will displace them. Inflation has tamed from the pandemic years, but remains stubbornly above the Federal Reserve’s target of 2%. And consumers are now showing strain, with the share of credit-card balances delinquent for at least 90 days hitting a 15-year high, according to the Federal Reserve Bank of New York…

Across all classes, about one-quarter of respondents said the nation was on the right track, with close to 70% saying it was headed in the wrong direction… [end quote]

Economic growth is being supported by spending by the upper middle and upper class, whose growing stock portfolios produce a wealth effect. Despite growing asset values, even the upper middle class is anxious. Should the stock market decline the economy will collapse like a house of cards since the spenders will clamp down.

Wendy

[pauleckler]

The economy continues to grow. Some say that is driven by tech spending—especially AI. The rest of the economy especially the consumer economy may be in recession. Inflation, costs rising faster than income, squeezing budgets is the main concern.

That we hope is temporary as the fed works to resolve the issue.

Over spending and the national debt is the major long term concern. Not to mention potential failure of Social Security and Medicare. Congress seems unwilling to address these issues. And they continue to get worse. This is the major threat to our system of govt. Grossly dysfunctional Congress.

[intercst]

@WendyBG

More than 40% of Americans who call themselves upper class or upper-middle class say they haven’t saved enough money to retire comfortably.

About 30% of the average family’s monthly spending is “skim, scam and fraud” (starting with the fact that we’re paying double the cost of healthcare in other large industrialized countries.) That’s what living in a crony capitalist economy does for you.

Focus on reducing the “skim”, and invest the savings in a low-fee S&P 500 index fund (which has grown more than 20-fold over the past 30 years.) You’ll enjoy a well upholstered retirement – and at a much earlier date than you ever imagined.

intercst

[Leap1]

@intercst

About 30% of the average family’s monthly spending is “skim, scam and fraud” (starting with the fact that we’re paying double the cost of healthcare in other large industrialized countries.) That’s what living in a crony capitalist economy does for you.

You are undercounting because the times have driven that way up. The sellers have gone rogue. Imaginary prices de jour.

[Kingran]

@WendyBG

Should the stock market decline the economy will collapse like a house of cards since the spenders will clamp down.

So far the numbers are not showing this fear, i.e., they continue to spend, and their expectation that Iran conflict will be short-lived, has only added to their spending. Unless the numbers tell a different story, no need to worry about that spending.

What I truly worry about is, interest rates. We all heard what Warsh has to say “Price stability”. The markets are expecting 2 25 basis point hike. Many old school economists are only focused on Oil from inflation point of view. But, inflation may be beyond Oil. Also, when Fed hikes, it may not be just 50 basis points, but could be more 75 basis point or even 1 full percentage point.

When interest rates goes up, markets come down. When markets come down the wealth effect goes down… etc, etc, etc.

One of the potential trigger is post mid-term, if Trump decides to bomb Iran again, no matter what, because there are many who are pressuring him that you have surrendered to Iran (it is BS but there are lot of folks who believe in that narrative). That could very well set off, the rate hike cycle or at the least give Fed sufficient cover to escape verbal assault from the President.

[Goofyhoofy]

@Kingran

markets are expecting 2 25 basis point hike. Many old school economists are only focused on Oil from inflation point of view. But, inflation may be beyond Oil. Also, when Fed hikes, it may not be just 50 basis points, but could be more 75 basis point or even 1 full percentage point.

Warsh will be fighting tooth-and-nail to prevent any hikes, and with at least a bit of support from a couple of others around the table.

And yes, inflation is already “beyond oil” although that will be the proximate cause, at least for the next 12 months. It gets baked into everything: transport of good to consumer, production of goods, costs of power, fertilizer, and food, omg, Food!

I enjoyed Wendy’s post (separate thread? I forget) about the 5 “committees” being charted; I’m not sure what magic levers they will or won’t discover, but Warsh is going to do everything he can to “make change” without upsetting the boss.

[Leap1]

@Goofyhoofy

without upsetting the boss.

The “boss” is done. He is talking about being Hoover 2.

Warsh does not have to listen to him.

Frankly, Trump talking about Hoover put him into a teary mood. Sad. Not!

@Kingran

The US consumer is tapping out. Iran has little to do with that.

At this point if I was a Rep. I’d be changing my affiliation. It would be the least of the lies involved.

[Kingran]

@Goofyhoofy

Warsh will be fighting tooth-and-nail to prevent any hikes

I am not so such about it. The press conference is his, he said at least 5 or 6 times, the committee will work for “price stability”, in fact, I am paraphrasing here, he took a slight dig at previous fed that they didn’t do enough to fight the inflation.

Already markets are pricing 50 basis point hike by year end.

@Goofyhoofy

Warsh is going to do everything he can to “make change”

That is clear. The communication, forward guidance, reserves all will have change. Those committee’s will not only consist of Fed economists but will include others who hold different views than the prevailing Fed “wisdom”. Changes are coming, but I don’t think Trump cares about those academic changes. The only thing “RE builder” cares about is lower interest rate. Unfortunately, Trump may very well have buyer’s remorse.